Cloud services and business software underpin everyday operations across UK businesses and public sector organisations, shaping productivity and access to digital tools. As artificial intelligence becomes embedded into workplace systems, ensuring fair competition and flexibility in these markets is increasingly relevant to economic resilience and innovation.
The Competition and Markets Authority has announced a package of actions targeting cloud services and business software, including a planned investigation into Microsoft’s ecosystem. The measures also follow engagement with Microsoft and Amazon on interoperability and cloud egress fees affecting UK customers.
CMA announces cloud and software actions
The CMA outlined a coordinated set of actions across cloud services and business software to address competition concerns and improve outcomes for UK customers. The measures are designed to increase flexibility and reduce barriers in how organisations use digital tools.
- Launch of Microsoft investigation
- Engagement with cloud providers
- Focus on interoperability improvements
- Review of customer switching barriers
Investigation into Microsoft business software ecosystem
The CMA will begin a strategic market status investigation into Microsoft’s business software ecosystem in May. The investigation will examine how software licensing practices may affect competition in cloud markets.
The review reflects the widespread use of Microsoft products across UK organisations and concerns about how these tools interact with cloud services. An SMS designation could allow the CMA to introduce measures to address identified competition issues.
Measures to improve cloud competition and interoperability
Microsoft and Amazon have set out actions following engagement with the CMA to improve interoperability and address cloud egress fees. These steps are intended to reduce the cost and complexity for organisations using more than one cloud provider.
- Reduced cloud egress costs
- Improved system interoperability
- Support for multi-cloud usage
- Ongoing CMA engagement
Cloud competition measures overview
| Measure | Description |
| Interoperability actions | Changes aimed at improving compatibility between cloud providers |
| Egress fee adjustments | Steps to reduce costs when transferring data between providers |
| Regulatory engagement | Ongoing CMA oversight to assess effectiveness of actions |
Barriers to switching and multi-cloud adoption
The CMA identified ongoing concerns affecting the ability of organisations to switch providers or adopt multi-cloud strategies. These include technical and commercial barriers linked to licensing and system compatibility.
Further engagement is planned with customers and competitors to understand these issues. The CMA will review progress over a six-month period.
Customer switching challenges
| Challenge | Description |
| Switching complexity | Difficulties in moving services between providers |
| Licensing constraints | Restrictions linked to software usage across cloud platforms |
| Integration barriers | Technical limitations affecting interoperability |
Role of AI in shaping market competition
The CMA highlighted the growing role of artificial intelligence within business software and its impact on competition. AI integration into productivity tools is changing how organisations use digital services.
The authority stated that maintaining a level playing field will support innovation and allow organisations to choose tools from different providers based on their needs.
Market context from CMA cloud investigation
The CMA’s earlier investigation into cloud services found that Amazon and Microsoft hold positions of significant market power. The review identified barriers to competition related to interoperability and data transfer costs.
These findings informed the current package of actions and ongoing engagement with industry participants.
Expected next steps and review timeline
The strategic market status investigation into Microsoft’s ecosystem is expected to begin in May and may take up to nine months to complete. The CMA will publish a provisional view before reaching a final decision.
The authority will also continue engagement with industry participants and review progress on interoperability and switching improvements within six months.
Stakeholder Comments
Sarah Cardell, Chief Executive of the CMA said;
“We’re using the regime in a flexible, pragmatic way to deliver real impact, as quickly as possible, for UK customers. This announcement shows we’re not just responding to today’s concerns but getting ahead of emerging issues too.”
“At the same time, we’re taking action now, deciding to launch an investigation into Microsoft’s business software ecosystem to ensure a level playing field as AI is embedded into everyday tools.”
In Conclusion
The CMA’s actions set out a structured approach to addressing competition concerns across cloud services and business software in the UK.
The combination of regulatory investigation and industry engagement aims to support improved interoperability, reduce barriers, and maintain competitive conditions as digital markets evolve. Further reviews and consultation will determine the effectiveness of these measures.
Sources: Competition and Markets Authority.
Prepared by Ivan Alexander Golden, Founder of THX News, an independent news organisation delivering timely insights from global official sources. Combines AI-analysed research with human-edited accuracy and context.
