A designation is a starting gun, not a ruling
On 16 October the UK competition regulator, the CMA, proposed giving Microsoft strategic market status across its business software, which the regulator says more than a million UK firms and public bodies use. Our news report covers the announcement itself. This piece looks at the clock. The CMA’s own timetable puts a final designation decision in February 2027, and its roadmap places its planned work, the Copilot question included, in “the first half of any designation period”, a period the law sets at five years. For UK organisations deciding now which AI tools to run alongside Microsoft 365, the case is a long process, not an imminent change in the rules.
Strategic Insight: The roadmap is explicit that it “does not set out the evidence or reach a view on interventions”. Nothing published on 16 October alters Microsoft’s products or licence terms. What it does is name the questions the CMA intends to investigate, including whether rival AI tools can compete fairly with Copilot.
Why the timetable matters more than the headline
The proposal comes five months into a process that began on 14 May 2026, when the CMA opened its inquiry using powers in the Digital Markets, Competition and Consumers Act 2024. Responses to the proposed decision are due at 5pm on 13 November 2026. After that, the CMA’s indicative timetable gives Microsoft a chance to make oral representations in November, allows for more evidence gathering into December, and schedules the final report for February 2027, with a statutory deadline of 13 February for the decision notice.
The real story: designation only unlocks the next stage
Designation by itself imposes nothing. Under the Act, the CMA has two tools: conduct requirements, and pro-competition interventions (PCIs). The roadmap states that any proposed requirement or intervention would be consulted on before it is imposed. PCIs need a further investigation that finds harm to competition before they can be used at all. The CMA has also said it will give an update on its areas of focus after the final designation decision.
That sequence is why the Copilot question will not be settled quickly. Any requirement or intervention must be consulted on before it is imposed, and the roadmap frames its areas of focus as evidence gathering, not decisions.
| Milestone | Date or figure | Strategic implication |
|---|---|---|
| SMS investigation opened | 14 May 2026 | The case is already five months old |
| Consultation on proposed designation closes | 13 November 2026 | The near-term point at which customers and rivals can put evidence on record |
| Statutory deadline for the designation decision | 13 February 2027 | No conduct rules can apply before this |
| Length of a designation period under the Act | 5 years | The roadmap’s “first half” of that period runs well beyond 2027 |
| Google search: designation to first conduct requirement | About 8 months | A precedent for how long the next stage can take |
Strategic Reality: In the Google search case the CMA published its proposed decision and roadmap on 24 June 2025, designated Google on 10 October 2025, consulted on conduct requirements from 28 January 2026, and imposed the first one on 3 June 2026. A user choice requirement was still in further consultation on 23 September 2026.
What the CMA is actually asking about Copilot
The AI strand of the roadmap is about integration and access. The CMA plans to examine whether rival providers of AI tools for Microsoft’s productivity software can integrate with it, operate alongside it, and be found and opened from within it. The proposed decision treats Microsoft 365 Copilot, Copilot Chat, Copilot Cowork, agents for Microsoft 365 Copilot and the Copilot app as part of the productivity suite under review, plus the Graph API, Work IQ and Agent 365 where those underpin it.
Critical Context: The two sides disagree on the facts. Microsoft told the CMA that rivals can use public APIs and so “can obtain substantially the same access to Microsoft 365 organisational data as Copilot itself”. Rival providers said the question is whether those APIs match the functionality Copilot gets, what fees apply, and whether their tools can be found and used inside parts of the product Microsoft controls.
The roadmap lists the concerns rivals raised:
- Free access as a funnel: rivals argued that Microsoft customers getting free Copilot straight away may push users towards a paid licence.
- Bundled discounts: they pointed to discounted bundles, both through E7 and Enterprise Agreements, as making it hard to compete.
- Dependence on Microsoft’s APIs: they said relying on Microsoft’s interfaces leaves them and their customers more exposed to API changes than Microsoft itself.
- Defaults and steering: among examples of steering, the roadmap records a submission that Office 365 customers may experience “a default pull toward Copilot” because it is bundled and pre-provisioned.
What customers told the CMA’s researchers
The CMA’s customer research, carried out by Jigsaw Research, adds the customer view. Business customers are trying other assistants, Claude and ChatGPT among them. Customers often choose Copilot for its perceived security benefits and its integration with Microsoft 365, whilst planning to keep using other assistants where they work better or suit specialist needs. Customers who have bought Copilot told researchers its return on investment is unclear against what they see as a high licence cost, and they worry about future price rises. The CMA says it will investigate whether those concerns arise because customers cannot switch to another AI provider.
Reality Check: The research describes AI assistant use in productivity software as still evolving, with customers testing several tools. The CMA says it will test whether customers’ cost worries reflect an inability to switch.
Who is affected, and how far the sources go
The groups touched by this case are easy to name. What changes for each of them is mostly still unknown.
| Group | What the sources say | What is still unknown |
|---|---|---|
| UK businesses and public bodies on Microsoft 365 | About 20 million people use the software each month; the CMA wants them able to combine products from different suppliers | Whether any requirement will change bundles or licence terms, and when |
| Rival AI assistant providers | The CMA will assess whether they can compete with Copilot on fair terms | Whether parity or prominence requirements are proposed at all |
| Security software vendors | Rivals say Microsoft’s integration and bundling of security products disadvantages them | Whether the CMA will treat security as an area for possible intervention |
| Government and critical services | The CMA links choice over digital and AI services to resilience and strategic autonomy | How public sector buyers will use any new rights in procurement |
The press release adds a separate point for government. For government and critical organisations, the CMA says the freedom to pick, move between and mix digital services without leaning too heavily on one provider matters increasingly for resilience.
What this means for organisations choosing AI tools now
The roadmap gives no date for any AI intervention, and it describes possible measures only as options that further investigation could support. Organisations weighing Copilot against other assistants are therefore deciding under today’s terms.
Hidden Cost: Rival providers told the CMA that large customers are often tied into multi-year Enterprise Agreements, which make adding non-Microsoft products unattractive because of high switching costs.
The open questions the roadmap leaves unresolved
Will the CMA follow the EU on Teams?
The European Commission accepted Microsoft commitments in 2025 on unbundling, interoperability and transparency for Teams. The CMA notes that these do not formally apply in the UK and says it will consider whether to act here, taking account of how the commitments work in Europe.
Is cloud licensing back on the table?
The CMA’s cloud market investigation concluded in July 2025 that Microsoft’s licensing of some business software restricts choice and weakens competition in cloud services. The roadmap says evidence since then shows Microsoft has not changed those practices, and the CMA plans further work under the 2024 Act if Microsoft is designated.
How fast can a regulator move in a market it calls fast-moving?
The roadmap acknowledges that AI in productivity software is a fast-moving area. The Google precedent suggests months between each stage. Copilot Cowork and Agent 365 already appear in the proposed scope, but the process runs on statutory deadlines and consultations, not product cycles.
Competitive Reality: If the CMA were to move at the Google pace, around eight months from designation to a first requirement, a February 2027 designation would put a first requirement in autumn 2027. That is an illustration from one precedent, not a forecast, and the roadmap commits to no date.
What to watch
- Consultation responses after 13 November 2026. The CMA’s timetable says responses, minus confidential material, will be published in November. Submissions from AI providers and large UK customers should show whether the Copilot strand has evidence behind it or rests mainly on rivals’ complaints.
- The final decision by 13 February 2027. A designation that keeps Copilot and its agent products within the productivity suite would confirm the AI strand can proceed. Narrowing that scope would signal the opposite.
- The post-designation update on focus areas. The roadmap promises this after the final decision. If AI features and functionality stay on the list, the next marker is a consultation on specific measures, such as parity of access or unbundling of AI features.
- The spring 2027 cloud update. The CMA has promised a further report on its informal cloud engagement with AWS and Microsoft. Progress there, or a move to a full SMS investigation in cloud, would indicate how much the regulator is prepared to push on licensing.
The CMA has framed this case around customers combining software and AI from rival suppliers as they see fit. Whether that becomes a practical option inside Microsoft 365 depends on stages that, on the CMA’s own published dates, have not yet started. For UK organisations, the useful question is not whether the CMA will act, but which of today’s AI decisions will still be open when it does.
Source: CMA takes first steps to ensure choice in business software (Competition and Markets Authority, 16 October 2026). Timetable and roadmap detail from the CMA’s Microsoft’s business software ecosystem case page and its indicative roadmap (16 October 2026). Google precedent dates from the CMA’s Google general search case page. Designation period from section 18 of the Digital Markets, Competition and Consumers Act 2024.
This strategic analysis was written by Resultsense, a UK-focused AI news and analysis publication. We will be watching whether the CMA’s final decision in February keeps Copilot and its agents in scope. Read more analysis at Insights, or get in touch.