The Competition and Markets Authority’s (CMA) decision to open a Strategic Market Status (SMS) investigation into Microsoft’s business software ecosystem marks a defining moment for the UK digital economy.
Designating Microsoft with SMS under the Digital Markets, Competition and Consumers Act is a legal and economic necessity. Only last week, Microsoft announced a “bring your own licence” scheme for AWS’s relational database service. This ended a practice where, for many years, users had to “double pay” for licensing if they wanted to use a fully-managed database service on a rival cloud.
This kind of concession, made ahead of the CMA’s investigation, is a classic. For too long, Microsoft has used the tactic of making small and immaterial concessions to delay, narrow, or diminish regulatory processes while continuing to harm consumers, competitors, and the wider industry. Its legacy licensing models have enforced artificial pricingand functionality asymmetries for years. The UK cannot afford to mistake token adjustments for meaningful reform.
At the Open Cloud Coalition – a group of almost 30 Cloud businesses from across the UK and Europe – we see four clear tests for the success of the CMA’s investigation.
These are:
Enforceable remedies, not voluntary commitments. Ultimately, the success of this intervention hinges entirely on the CMA resisting the temptation of a box-ticking exercise. This cannot conclude with perfunctory compliance or empty, voluntary corporate pledges. Historically, tech giants under scrutiny deploy a well-rehearsed playbook that circumvents regulators by re-packaging bundles and introducing superficial tweaks to preserve the underlying commercial harm. Only legally binding, enforceable remedies will restore genuine market contestability.
Pricing parity and functional equivalence. Enforceable remedies must mandate absolute pricing parity and remove any artificial discounts or licensing architectures that make running workloads on Azure systematically cheaper than on a rival. These remedies must also guarantee functional equivalence to ensure Microsoft’s competitors receive the same level of performance, security, interoperability, and system support as Azure, without any degradation or delay.
Maintain the full scope of the investigation. The CMA must maintain the full breadth of its proposed scope and ensure its interventions are future proofed. Microsoft’s software-to-cloud leveraging is actively expanding into next-generation enterprise workflows. By embedding Copilot and agent-based AI functionalities into its dominant identity and productivity layers, customers are locked into a single, self-reinforcing commercial stack. If the CMA fails to extend its remedies to enterprise AI now, today’s cloud distortions will permanently anchor tomorrow’s AI monopolies.
Finally, the CMA must move at pace to develop remedies in parallel with the investigation rather than waiting until 2027. Digital markets move too rapidly for protracted bureaucracy.
In fast-moving digital markets, delayed regulation is failed regulation. The UK’s new digital regime was built specifically to bypass traditional, sluggish anti-trust frameworks. The CMA must now wield these powers decisively to secure a vibrant, open, and resilient cloud and AI ecosystem – judging success not by formal corporate compliance, but by real-world outcomes that enable genuine customer choice.
Nicky Stewart is senior advisor to the Open Cloud Coalition.
