UK competition regulator targets Microsoft’s software and Copilot position

On October 16, 2026, Reuters reported that the UK Competition and Markets Authority proposed designating Microsoft with strategic market status in business software, opening the way to intervention around bundling, licensing and customer choice involving products including Copilot. The CMA said it would examine whether customers can freely choose AI tools and whether rivals can compete, with a final designation decision expected by February 2027; Microsoft disputed the regulator’s view and said its products are interoperable. Legal teams buying AI through Microsoft 365 should treat suite convenience and long-term contestability as separate questions, testing data portability, connector neutrality, licensing dependencies and the practical ability to switch models. The inquiry could also strengthen procurement demands for modular architectures across the UK even before any formal conduct requirement is imposed.