UK Regulator Reopens Probe Into Microsoft’s Cloud Licensing Practices

The Competition and Markets Authority said Tuesday it would take another look at how Microsoft structures its licensing, months after earlier findings did not immediately trigger enforcement action. According to Reuters, the regulator is now broadening its scrutiny to better assess how Microsoft’s broader software ecosystem may influence competition.

The renewed focus follows a prior inquiry in which the CMA concluded that the dominance of Amazon and Microsoft was harming competition in cloud services. Per Reuters, Microsoft was specifically criticized for leveraging its enterprise software products, including Windows Server and Microsoft 365, to impose additional licensing costs when customers used rival cloud platforms.

Regulators beyond the UK are also paying close attention. Authorities in both the European Union and the United States are conducting their own investigations into the cloud computing market, reflecting growing global concern about concentration in the sector, according to Reuters.

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Despite the renewed probe, the CMA noted that both Microsoft and Amazon have recently taken steps to address some competitive concerns. The regulator said the companies were making “material steps” to reduce certain fees in the cloud market, including those related to data transfers and interoperability.

Read more: Japan Steps Up Tech Oversight With Microsoft Cloud Probe

Together, Amazon and Microsoft control an estimated 30–40% each of the cloud services market, which includes computing power, storage, and networking. Google remains the third major player, though with a significantly smaller share of roughly 5–10%, per Reuters.

The CMA indicated that its new investigation could lead to Microsoft being designated with “strategic market status” in business software. Such a classification would give the regulator stronger powers to intervene directly in how the company structures its licensing practices.

CMA chief executive Sarah Cardell said the authority was taking a practical approach to enforcement. She emphasized that progress had already been made through engagement with major providers but signaled expectations for further changes in the near future.

“Cloud remains central to our approach – we’ve seen real progress through our engagement with Microsoft and Amazon to drive meaningful improvements on egress fees and interoperability and we expect more action from them over the coming months,” she said.

Microsoft responded by highlighting adjustments it has already agreed to implement. The company said the changes focus on reducing friction around data movement, switching between providers, and improving interoperability. Vice chairman and president Brad Smith said the measures aim to ensure UK customers can operate across different cloud platforms with greater flexibility.