The UK's Competition and Markets Authority (CMA) has found that Amazon Web Services (AWS) and Microsoft have taken steps to reduce competitive barriers in cloud services, yet the regulator believes substantially more progress is required to expand options available to enterprises.
The CMA indicated it remains in active dialogue with both firms to drive additional commitments. In tandem, the authority is putting forward a proposal to classify Microsoft as holding strategic market status (SMS) within the UK's business software sector.
This proposed designation could trigger intensified regulatory oversight of Microsoft's conduct, particularly regarding product bundling, service integration and the terms under which software operates across competing cloud infrastructure.
The CMA will open a consultation period before finalising its decision on the designation.
According to the regulator's assessment, Microsoft maintains commanding influence across five critical domains: PC operating systems, productivity software, security software, server operating systems and database management systems.
The CMA identified obstacles that prevent customers from moving between suppliers. It also noted that Microsoft's commercial strategies and the interconnected nature of its product ecosystem create friction for rival software makers attempting to build user bases. The regulator plans to investigate whether organisations retain genuine autonomy in selecting where their applications run, particularly when deploying cloud infrastructure from competing vendors.
The authority will also scrutinise whether Microsoft's licensing framework discourages switching to alternative cloud platforms.
Artificial intelligence represents an additional focus area. The CMA will examine whether enterprises can freely select AI solutions from multiple vendors or encounter restrictions when opting for tools outside Microsoft's Copilot offering.
Business software and cloud services underpin workplaces across the UK, from small firms to vital public services. The evidence shows Microsoft has a long-standing and significant presence in the UK's business software market.
Sarah Cardell, CMA CEO
Organisations should be able to choose the products that work best for them, switch provider when they want to and combine services from different suppliers. We want to ensure businesses have the freedom to choose how they use Microsoft's products alongside alternatives.
Sarah Cardell, CMA CEO
We're now consulting on whether to designate Microsoft with strategic market status. If we do, our focus would be on promoting competition and giving businesses greater freedom to choose and combine products in business software.
Sarah Cardell, CMA CEO
We've also been engaging with AWS and Microsoft outside a formal designation process to deliver greater customer choice in cloud services. Meaningful improvements have already been made, with more to come and we're continuing to work with both companies to agree further actions.
Sarah Cardell, CMA CEO
An Amazon representative responded positively to the CMA's findings, stating: "We welcome the outcome of the Competition and Markets Authority's (CMA) review, which recognises the concrete steps AWS has taken to enhance customer choice and flexibility in the UK.
As outlined in our recent blog, we've continued to invest throughout 2026 in new AI, multi-cloud, and open-standard capabilities that give customers more control over how they build and operate, to help the UK's innovation economy thrive.
Amazon spokesperson
