Microsoft Regulatory Roundup 2025

Key Takeaways

• The European Commission accepted Microsoft’s Teams commitments in September 2025, avoiding a potential fine of up to 10% of global revenue (approximately $24 billion); Microsoft rebundled Teams globally in November 2025 while lowering unbundled prices and raising Teams standalone pricing to create economic neutrality

• Microsoft settled the CISPE cloud licensing complaint for approximately €20 million, but AWS, Google, and Alibaba remain excluded from any remedy

• The UK Competition and Markets Authority concluded that “competition is not working well” in cloud services, recommending Strategic Market Status investigations for Microsoft and AWS in early 2026

• The European Commission opened three Digital Markets Act investigations into cloud computing in November 2025, examining whether AWS and Azure should be designated as gatekeepers

• The US Federal Trade Commission’s broad antitrust investigation into Microsoft, launched in late 2024, continued under the new administration with bipartisan support

• A £1.7-2.1 billion class action against Microsoft’s cloud licensing practices reached the UK Competition Appeal Tribunal in December 2025, with a ruling on certification pending

• The Competition Appeal Tribunal ruled in November 2025 that perpetual Microsoft licences can legally be resold, rejecting Microsoft’s copyright argument; Microsoft is appealing

Introduction

In the eyes of an inexperienced optimist, 2025 was supposed to be a year of reckoning for Microsoft’s licensing practices. Regulators across three continents had Microsoft in their sights. The European Commission was investigating Teams bundling. The UK Competition and Markets Authority was probing the entire cloud infrastructure market. European cloud providers had lodged formal complaints about anti-competitive licensing. The US Federal Trade Commission had launched its most comprehensive Microsoft investigation since the landmark 1990s case. And a coalition of nearly 60,000 UK businesses was preparing to sue for billions in alleged overcharges.

By the end of the year, Microsoft had emerged largely unscathed. The Teams investigation ended in a settlement with no fine. The CISPE complaint was withdrawn after a cash payment. The CMA recommended further investigations rather than taking action itself. The FTC probe continued quietly with no public developments since March. Only the UK class action remained genuinely in play, and even that was stuck at the procedural gate.

2025 produced settlements and proceedings, not customer relief. Teams closed with commitments and no fine, CISPE withdrew after a cash payment, and most other tracks entered 2026 with outcomes still pending.

Did any of this regulatory activity actually change anything? Did prices come down? Did licensing restrictions ease? Did customers gain meaningful new freedoms?

The answer, for those paying attention rather than reading headlines, is largely no. The one genuine win – the ValueLicensing ruling confirming that perpetual licences can be resold – is still open to appeal. And even if it survives, the decision came years too late to matter. Second-hand licensing of Office is effectively a dead market. Which enterprises still have perpetual Office licences sitting around to sell? Microsoft’s subscription push has already done its work.

The EU Teams Settlement: Five Years to Unbundle, Zero Fines to Pay

How We Got Here

The Teams antitrust case began in July 2020, when Slack Technologies filed a formal complaint with the European Commission. At the time, Slack was an independent company with approximately 12 million daily active users, competing against Microsoft Teams in the enterprise collaboration market. Slack’s complaint alleged that Microsoft was abusing its dominant position in productivity software by bundling Teams with its Microsoft 365 and Office 365 suites at no additional visible cost.

The timing was not coincidental. The COVID-19 pandemic had triggered an explosion in remote work, and Teams usage had surged from 20 million daily users in November 2019 to 75 million by April 2020. By the time Slack filed its complaint, the market dynamics had already shifted dramatically in Microsoft’s favour.

By the time Slack filed its complaint, Teams’ pandemic-driven adoption had already shifted market dynamics in Microsoft’s favour—years before regulators intervened.

Slack’s argument was simple: organisations that already paid for Microsoft 365 received Teams as part of their subscription. They had no financial incentive to evaluate alternatives. Even if Slack offered a superior product for certain use cases, IT departments faced the path of least resistance: use what they already had. The bundling, Slack argued, made genuine competition impossible.

In December 2020, Salesforce announced its acquisition of Slack for $27.7 billion. The complaint continued under Salesforce’s ownership, though Slack’s position in the market had fundamentally changed. It was no longer an independent startup fighting for survival but a subsidiary of a $200 billion enterprise software company.

The European Commission opened a formal investigation in July 2023. In June 2024, the Commission issued a Statement of Objections, formally accusing Microsoft of breaching EU competition rules. The Commission took the preliminary view that Microsoft had “abused its dominant position” by tying Teams to its productivity suites, thereby giving Teams “a distribution advantage that rivals cannot match.”

Microsoft faced a potential fine of up to 10% of its global annual turnover. Based on 2024 revenues of approximately $245 billion, this represented theoretical exposure of up to $24.5 billion.

Microsoft’s Response

Rather than fight the case to a conclusion, Microsoft moved to settle. The company had already begun unbundling Teams in the European Economic Area and Switzerland from October 2023, making Teams-free versions of Microsoft 365 available at reduced prices. In April 2024, Microsoft extended this unbundling globally, offering customers worldwide the option to purchase productivity suites without Teams.

These preemptive moves served multiple purposes. They demonstrated willingness to address regulatory concerns. They established precedent that Microsoft could point to as evidence of good faith. And they allowed Microsoft to test the commercial impact of unbundling before any regulatory mandate forced its hand.

The commercial impact, as it turned out, was minimal.

The September 2025 Settlement

On 12 September 2025, the European Commission announced it had accepted Microsoft’s commitments, formally closing the investigation without finding an infringement and without imposing any fine. Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition, stated: “With today’s decision, we make binding for seven years or more Microsoft’s commitments to put an end to its tying practices that may be preventing rivals from effectively competing with Teams.”

The settlement included the following commitments:

• Unbundling Requirements (7 years): Microsoft must continue offering Microsoft 365 and Office 365 suites without Teams at reduced prices. Following market testing between May and June 2025, Microsoft agreed to increase the price difference between bundled and unbundled versions by 50% compared to its original proposal.

• Interoperability Obligations (10 years): Microsoft must provide enhanced interoperability, allowing competing collaboration tools to integrate more effectively with Microsoft 365 applications. The obligation includes better pathways for rivals like Slack to connect with and function within the Microsoft ecosystem.

• Data Portability (10 years): Microsoft must make it easier for customers to migrate their data out of Teams and into competing products.

• Monitoring: An independent trustee will oversee Microsoft’s compliance. Failure to comply could result in fines of up to 10% of global revenue without requiring the Commission to prove any violation.

Both Slack and Alfaview GmbH, a German video conferencing company that had filed a separate complaint in 2024, withdrew their complaints following the market test.

The November 2025 Rebundling

On 1 November 2025, Microsoft implemented the settlement terms globally. The headline change was unexpected: the Teams-inclusive bundles that Microsoft had retired in 2023-2024 came back.

New and existing customers worldwide could once again purchase Microsoft 365 and Office 365 Enterprise suites with Teams included. The unbundled “no Teams” options remained available alongside them. In effect, Microsoft reversed the unbundling while adding the unbundled alternatives as permanent options.

The pricing mechanics, however, were structured to create economic neutrality between the two paths. The Commission required Microsoft to maintain specific minimum price gaps between bundled and unbundled suites:

• Enterprise suites (M365/O365 E3, E5): €8.00 ($8.55) minimum difference

• Business Standard and Premium, Office 365 E1: €3.00 ($3.21) minimum difference

• Business Basic: €1.50 ($1.60) minimum difference

• Microsoft 365 F3: €1.00 ($1.07) minimum difference

Microsoft met these requirements by lowering unbundled prices and raising the Teams standalone price. Office 365 E3 without Teams dropped from $20.75 to $14.45 (a 44% reduction), while Teams Enterprise rose to $8.55. An organisation buying O365 E3 without Teams ($14.45) plus Teams standalone ($8.55) now pays $23.00, identical to the bundled O365 E3 with Teams. For the complete pricing breakdown across all suite types, see our detailed analysis.

The pricing changes were designed to achieve economic neutrality: buying a suite without Teams and adding Teams separately costs the same as purchasing the bundled version.

The settlement also imposed constraints on Microsoft’s discounting behaviour. Any discounts offered on Teams-inclusive suites must apply equally to Teams-exclusive suites at the same percentage rate. Microsoft cannot use selective discounts to steer customers toward bundles. This provision, arguably more significant than the list price adjustments, prevents the kind of deal structuring that could undermine the settlement’s intent.

For customers in the European Economic Area on multi-year contracts, the settlement added switching rights. EEA customers can transition between Teams-inclusive and Teams-exclusive suites at their annual order period for the next five years, through 2030. When switching, customers pay the current market price for the new suite while maintaining their existing percentage discount. Partners may choose whether to offer these same guarantees, so customers should verify their partner’s approach.

The price deltas are locked in USD for seven years. Currency fluctuations may affect Euro pricing, but the dollar amounts remain fixed through 2032.

But Was There Any Market Impact?

As of 2024, Microsoft Teams had approximately 320 million monthly active users. Slack had approximately 42 million daily active users and 65-79 million monthly active users, depending on the source and measurement period. Teams held between 44% and 53% market share in team collaboration tools, while Slack held between 18% and 19%.

Did unbundling change these dynamics? The data suggests not.

According to Sensor Tower data reported by Reuters, monthly active users of the Microsoft Teams mobile app “remained largely level” between the fourth quarter of 2023 and the first quarter of 2024, hovering around 19 million mobile users. This period covered the initial European unbundling.

Slack’s user base has continued to grow, with daily active users projected to increase from 38.8 million in 2024 to 47.2 million by the end of 2025. However, analysts attribute this growth to general market expansion rather than customers switching from Teams.

When Microsoft announced global unbundling in April 2024, Morgan Stanley analysts predicted it would make no difference: Microsoft’s decision is “unlikely to change the O365 commercial growth trajectory, as more consolidation (not less) seems to be the direction of travel for CIOs due to macro pressures and technological progress like GenAI driving stronger gains for the broader suites and deeper data sets.” The November 2025 rebundling proved them right.

What Analysts Said at the Time

The analyst consensus during the unbundling period was blunt. Forrester analyst Andrew Hewitt and colleagues published a pointed analysis in May 2024 titled “Microsoft Unbundling Teams From Microsoft 365 Is Just A Sneaky Price Hike, ”arguing that Microsoft had “turned the bogeyman of a wider antitrust investigation into an excuse to reprice its products in ways that are advantageous to Microsoft.” On the competitive question, Forrester was equally direct: “From an antitrust standpoint, this move is too little, too late. Microsoft Teams has already won the battle against Zoom, Slack, and the plethora of smaller competitors.”

IT Pro’s analysis reached a similar conclusion: “Slack won the battle over Microsoft Teams unbundling – but it will lose the war.” Despite forcing Microsoft’s hand globally, Slack showed no measurable market share gains.

J.P. Gownder, a Forrester Vice President and Principal Analyst, told iStart that organisations using Zoom “will perhaps save a tiny amount of money” by choosing unbundled options, but added: “I don’t think it changes the fundamentals of the market much.” Jim Gaynor at Directions on Microsoft summarised what many in the licensing community suspected: “In the end, this move is about Microsoft trying to stay ahead of regulatory scrutiny, not about offering customers a way to reduce costs.”

Financial markets agreed. The Courthouse News Service reported that “Microsoft shares traded with minimal volatility following the settlement announcement, according to financial market data, suggesting investors viewed the outcome favorably as the company avoided massive penalties while resolving a major regulatory overhang.”

These analysts have not publicly revisited their assessments following the September 2025 settlement and November rebundling.

What It Means in Practice

If your organisation uses Slack, Zoom, or another collaboration platform instead of Teams, you now pay less for Microsoft 365. Office 365 E3 without Teams costs $14.45, down from $20.75 – a 44% reduction. The saving is genuine, though finding the right SKU takes some effort. Microsoft now lists 12 different “no Teams” variants across its enterprise and business tiers, plus Teams Enterprise standalone.

Teams users see no change. The bundled prices are identical to what they were before unbundling began.

Organisations with mixed requirements – Teams for some user populations, alternatives for others – face procurement complexity. Managing multiple SKUs adds overhead. Whether the savings justify that overhead depends on your scale and your appetite for licensing administration.

The timing made everything harder. Rebundling took effect on 1 November 2025, the same date Microsoft removed Enterprise Agreement volume discounts. Organisations renewing after November faced both changes simultaneously.

🖐 Secure better outcomes in a more complex EA renewal landscape. Learn more: Microsoft Enterprise Agreement Negotiation.

The CISPE Settlement: €20 Million to Make a Complaint Disappear

How It Began

The Cloud Infrastructure Services Providers in Europe (CISPE) is a trade association representing European cloud service providers. Its membership includes both small European providers and, notably, Amazon Web Services. In November 2022, CISPE filed a formal competition complaint with the European Commission, alleging that Microsoft’s software licensing practices were harming the European cloud market.

Microsoft charged significantly higher prices for customers to run Windows Server and SQL Server on competing cloud platforms like AWS, Google Cloud, and Alibaba Cloud compared to running the same software on Microsoft’s own Azure platform. CISPE’s research suggested the differential could be as high as four to five times the cost. A study commissioned by CISPE estimated that European businesses were paying over €1 billion annually in additional costs due to these licensing practices.

This wasn’t a new grievance. Microsoft had introduced outsourcing restrictions in 2019 that created pricing disparities between Azure and competing clouds. European providers had complained for years that Microsoft was using its dominance in operating systems and database software to steer customers toward Azure.

The Commission began asking questions. Cloud providers and their customers received information requests about Microsoft Azure, specifically concerning discriminatory pricing, product bundling, and how Microsoft used data about its cloud customers.

Early Settlement Attempts

Microsoft attempted to settle the complaint before a formal investigation could begin. In May 2023, CISPE rejected Microsoft’s initial offer. A CISPE spokesperson told The Register: “It was a pretty paltry offer and very far short of anything we consent acceptance of. In principle, we are happy to settle it between us, but we have minimum requirements before we expect negotiations to go forward.”

At the time, CISPE set out clear principles for any acceptable settlement. The agreement must be “principle-based and apply to all cloud infrastructure providers operating in Europe.” It must “benefit all customers in Europe” and “ensure that all businesses have the right to run the software they license on the cloud of their choice, without financial or technical penalties.”

The July 2024 Settlement

In July 2024, CISPE announced it had reached a settlement with Microsoft. The terms included:

• Cash Payment: Microsoft paid €20 million ($22 million) to CISPE and its members, covering legal costs and compensating members for claimed revenue losses over the preceding two years. For context, a single CISPE member had provided the Commission with evidence of almost €20 million in customers lost to Microsoft’s pricing practices over three years. The settlement for all members combined was roughly what one member claimed to have lost.

• New Product Commitment: Microsoft committed to developing an “enhanced version” of Azure Stack HCI for European cloud providers (internally called “Azure HCI Stack for Hosters” or the “Hoster Product”) within nine months. This product would allow CISPE members to run Microsoft software on their own infrastructure at equivalent prices to Microsoft Azure.

• Audit Suspension: Microsoft suspended licensing audits of CISPE members for two years.

• European Cloud Observatory: CISPE established the European Cloud Observatory (ECCO) to monitor Microsoft’s delivery of its commitments.

CISPE Secretary General Francisco Mingorance described the agreement as “a significant victory for European cloud providers” that would provide “a level playing field for European cloud infrastructure service providers and their customers.”

What Was Not Included

The July 2024 settlement contained significant exclusions and limitations.

AWS, Google, and Alibaba Excluded: The three largest cloud providers globally were explicitly excluded from the agreement’s benefits. The settlement applied only to CISPE members and their customers. Microsoft’s licensing practices toward AWS, Google Cloud, and Alibaba Cloud remained unchanged.

VDI and Identity Management Gaps: Windows 10/11 VDI multi-session and Entra ID interoperability were not addressed. These gaps would remain unresolved even after the July 2025 renegotiation.

Complaint Withdrawal: As part of the settlement, CISPE agreed to withdraw its complaint and refrain from lodging new or supporting similar antitrust cases against Microsoft on this matter.

The Hoster Product That Never Arrived

The centrepiece of Microsoft’s commitment, the Azure HCI Stack for Hosters product, never materialised as promised.

The European Cloud Observatory’s first progress report, published in February 2025, designated Microsoft’s status as “amber,” meaning the company was “off-track” to meet its agreed commitments. ECCO reported that while Microsoft and CISPE held a workshop in December 2024 to discuss product requirements, “Subsequent communications (in early 2025) have suggested that Microsoft is still ‘processing and evaluating’ and ‘digesting’ these requirements.”

Microsoft’s engineering teams, according to the ECCO report, argued that they had “a very long list of things they are working on” outside of the CISPE product and were “pushing” existing offerings like Azure Local as a solution. ECCO noted that Azure Local “would still require an Azure presence and license for each of the cloud provider’s customers.”

The report stated bluntly: “This is unacceptable to CISPE members.”

By May 2025, the Hoster Product had been effectively abandoned. Both Microsoft and CISPE acknowledged that “Azure Local will not deliver the full set of features outlined in the agreement” and began negotiating an alternative solution.

The July 2025 Renegotiation

In July 2025, CISPE announced a renegotiated agreement with Microsoft. Rather than the promised product, Microsoft offered commercial terms. The announcements used language that warrants scrutiny.

The July 2025 renegotiation replaced a promised product with commercial terms, without published details on how “Azure-comparable pricing” would work in practice.

CSP-Hoster Access with “Azure-Comparable Pricing”: CISPE announced that members can offer customers Microsoft software on a “pay-as-you-go basis via CSP-Hoster” with “pricing conditions more comparable to those of Microsoft’s own cloud platform, Azure.”

The announcement requires context. CSP-Hoster has existed since October 2022 and was already available to hosting providers. Under CSP-Hoster, the end client – not the provider – must own the licences, either through BYOL or by purchasing CSP subscriptions. CSP-Hoster is fundamentally different from how Azure consumption works, where Microsoft handles licensing transparently.

What specifically changed for CISPE members? The announcements do not clarify whether Microsoft introduced genuinely new pricing, granted access to existing CSP-H on preferential terms, or simply formalised arrangements that were already possible. The phrase “comparable to Azure” appeared in every press release but no source published actual pricing or explained the commercial mechanics. Phil Brunkard of Info-Tech told Computerworld that CISPE members could “bill Windows, SQL Server, and Microsoft 365 by the hour” – but hourly billing through CSP-H would require a mechanism that has not been publicly documented.

Microsoft 365 Local: Mentioned in the July 2025 CISPE announcement as enabling deployment on local cloud infrastructure for sovereign cloud use cases. However, Microsoft 365 Local is not a CISPE-specific product. It is part of Microsoft’s Sovereign Cloud offering, running Exchange Server and SharePoint Server on Azure Local infrastructure in customer datacenters. It became generally available in November 2025 and is available to any organisation that deploys Azure Local. The CISPE agreement merely confirms that members may resell it via CSP.

Privacy Provisions: CISPE announced that members can host Microsoft workloads without sharing customer details with Microsoft. The claim requires context. SPLA has always required providers to disclose end-client name and address if the client generates over $1,000 per month in revenue to Microsoft. CSP-Hoster, by contrast, requires only aggregate quarterly reporting – “no need to report them per customer,” as our own guide notes. If CISPE members use CSP-H instead of SPLA, they inherit CSP-H’s existing reporting requirements. Whether Microsoft granted any additional privacy provisions beyond standard CSP-H terms has not been disclosed.

The two outstanding gaps from 2024 remained unresolved. Windows 10/11 VDI multi-session is still prohibited on European-owned multi-tenant infrastructure. And the Entra ID lock-in persists: as CISPE Executive Advisor Mikkel Naesager explained, “There’s no ability to have a competing identity management and swap it out. We have been unable to make any headway there.”

In October 2025, ECCO published its third progress report. Having given Microsoft an amber rating in May, the Observatory upgraded Microsoft to green, acknowledging that the CSP-H alternative delivered the core commercial benefits CISPE members had sought.

The same report gave Broadcom a red rating for its VMware licensing practices. ECCO’s attention had shifted from Microsoft to Broadcom as the more pressing threat to European cloud competition.

Microsoft Joins CISPE

In January 2025, Microsoft joined CISPE as a member. A CISPE spokesperson confirmed that the trade group is “representative” of the European cloud industry “and that includes hyperscalers.” AWS had already been a CISPE member.

This development raised eyebrows. One source close to the matter asked The Register: “What value can CISPE be for European cloud providers? It seems like a stooge for Microsoft now.” Another said: “There are some seriously pissed off people.”

The CISPE spokesperson defended the decision: “It was always part of the discussions that at some point Microsoft might want to join. If anything, it strengthens our hand. They are a member, we have a good ongoing relationship and are keen to deliver what they said they’d deliver.”

External Criticism

The CISPE settlement drew sharp criticism from parties not included in the agreement.

Coalition for Fair Software Licensing: Executive Director Ryan Triplette told Computing: “This is more smoke and mirrors from Microsoft: offer weak concessions in an attempt to avoid regulatory scrutiny and disingenuously pretend these actions promote European competition.” Triplette called the settlement “a stalling tactic” giving Microsoft “more time to lock in customers with restrictive and anticompetitive licensing practices.”

Google Cloud: Head of Platform Amit Zavery called the 2024 settlement a “payoff” that would not address key complaints: “It is very disappointing that CISPE elected to take a ‘payoff’ from Microsoft instead of continuing to fight for a resolution that benefits European cloud customers. Microsoft’s playbook of paying off complainants rather than addressing their complaints shouldn’t fool anyone.”

AWS: A spokesperson told The Register that the settlement “does nothing for the vast majority of Microsoft customers who are still unable to use the cloud of their choice in Europe and around the world.” The spokesperson added: “Despite denying its licensing practices harm customers and competition, Microsoft is now making limited concessions for some CISPE members that demonstrate there are no technical barriers preventing it from doing what’s right for every cloud customer.”

Civo: CEO Mark Boost told Computing that the agreement “raises serious questions about fairness and transparency.” He added: “The concessions apply only to CISPE members, with no clarity on whether other cloud providers across Europe will benefit. Is this a private deal for a select few? Who decides who gets access, Microsoft or regulators? Without these answers, it is easy to arrive at the assumption that this is a workaround that protects market power instead of challenging it.”

Directions on Microsoft: Analyst Wes Miller wrote: “At the end of the day, the settlement is nothing. It won’t affect so-called listed providers and just promises to give a few Azure exclusives to the smaller ‘authorized outsourcers.’ It’s unclear what this settlement actually resolves other than a legal threat.”

Open Cloud Coalition: Senior Adviser Nicky Stewart told Data Centre Dynamics: “This bilateral deal between Microsoft and a subset of European providers leaves the vast majority of UK and EU customers facing the same high costs and restrictions.”

Google’s Alternative Offer

Bloomberg reported that Google had attempted to prevent the CISPE settlement by offering a more lucrative alternative just days before the deal was announced. According to the report, Google offered CISPE more than $500 million over five years in software licences, plus $15 million in cash, in exchange for CISPE continuing its complaint against Microsoft.

CISPE declined the offer. Google subsequently filed its own complaint against Microsoft with the European Commission in September 2024, citing similar concerns about discriminatory licensing practices. Google withdrew this complaint in November 2025, citing the Commission’s decision to launch its own investigation into cloud computing under the Digital Markets Act.

The UK CMA Investigation: Two Years to Conclude That Someone Else Should Investigate

The Ofcom Referral

The UK’s cloud infrastructure investigation began in October 2022, when the communications regulator Ofcom launched a market study into the provision of cloud services. In April 2023, Ofcom published an interim report raising concerns about competitive dynamics in the UK cloud market. In October 2023, Ofcom formally referred the supply of public cloud infrastructure services in the UK to the Competition and Markets Authority for a full market investigation.

The referral followed complaints from multiple parties about the conduct of the largest cloud providers. AWS and Google argued that Microsoft’s software licensing practices were limiting genuine competition. Microsoft and AWS faced criticism for egress fees and technical barriers that made switching between providers difficult and expensive. The UK Government itself had been flagged as heavily reliant on a small number of US hyperscalers.

The CMA investigation was initially expected to conclude by April 2025. In September 2024, the CMA extended its deadline to August 2025, citing the complexity of the issues involved. The investigation ultimately concluded on 31 July 2025 with the publication of a summary of the final decision, followed by the full final decision report.

Provisional Findings

On 28 January 2025, the CMA published its provisional findings. The CMA’s independent inquiry group concluded that competition in the UK cloud market was not working well. The provisional findings identified three main areas of concern:

Market Concentration: AWS and Microsoft each held between 30% and 40% of UK cloud spend. Together with Google (which held a significantly smaller share), the three providers dominated the market. Other providers like Oracle and IBM held minimal market shares. The CMA found that high barriers to entry and expansion made it extremely difficult for alternative providers to compete effectively.

Technical and Commercial Barriers: The CMA identified multiple barriers that made switching between cloud providers difficult. These included egress fees (charges for transferring data out of a cloud platform), incompatible architectures that locked workloads to specific vendors, and high capital expenditure requirements for alternative providers attempting to enter the market. The investigation found that less than 1% of customers moved between cloud providers annually.

Microsoft’s Software Licensing Practices: The CMA found that Microsoft’s licensing practices specifically disadvantaged AWS and Google in their ability to compete for cloud customers. The investigation noted that certain Microsoft software products were used “disproportionately on Azure” and that “given the very large difference, this is at least partly because some customers’ choice of cloud is influenced by Microsoft’s licensing practices.”

The CMA stated: “Microsoft’s licensing practices are adversely impacting the competitiveness of AWS and Google in the supply of cloud services, particularly in competing for customers.”

The Final Decision

On 31 July 2025, the CMA published its final decision. The headline finding was unambiguous: “Competition is not working well.”

The CMA confirmed that the market exhibited three distinct “adverse effects on competition” (AECs):

The CMA’s final report stated: “We consider that a more competitive market would show better market outcomes, including more consistently competitive prices, as well as further improvements in quality and innovation.”

Someone Else’s Problem

Having spent nearly two years investigating and documenting competitive harm, the CMA’s remedy was to recommend that someone else do something about it.

Rather than imposing its own remedies under existing market investigation powers, the CMA recommended using its powers under the Digital Markets, Competition and Consumers Act 2024 (DMCC Act) to launch “Strategic Market Status” (SMS) investigations into AWS and Microsoft.

The SMS designation, if granted, would enable the CMA’s Digital Markets Unit to impose “targeted and bespoke interventions” to address the identified concerns. But the CMA did not commence these investigations immediately. Instead, it stated that it would “keep under review possible options for further designation investigations” and anticipated that “the CMA Board will consider options in early 2026.”

The final decision summary stated: “This [SMS designation] would enable the CMA to impose targeted and bespoke interventions to address the concerns we have identified, including with respect to features where there are specification risks around the design of effective market interventions.”

In other words: we found problems, we identified the parties responsible, and we believe we have tools to address them, but we will think about whether to use those tools next year.

Reactions to the Final Decision

Microsoft: The company voiced frustration with the CMA’s findings. A Microsoft spokesperson stated: “The CMA Panel’s most recent publication misses the mark again, ignoring that the cloud market has never been so dynamic and competitive, with record investment, and rapid, AI-driven changes. Its recommendations fail to cover Google, one of the fastest-growing cloud market participants. Microsoft looks forward to working with the Digital Markets Unit toward an outcome that more accurately reflects the current competition in cloud that benefits UK customers.”

AWS: Similarly dismissive. An Amazon spokesperson stated: “The Inquiry Group’s final report disregards clear evidence of robust competition in the UK’s IT services industry, which cloud computing has revolutionised by dramatically reducing costs and expanding customer choice and flexibility. It risks making the UK a global outlier at a time when businesses need regulatory predictability for the UK to maintain international competitiveness. We will continue to engage constructively with the CMA as they consider their next steps.”

Google Cloud: Unlike the targets of potential investigation, Google welcomed the findings. Chris Lindsay, VP of Customer Engineering EMEA at Google Cloud, described the report as “a watershed moment for the UK” and urged swift action from the Digital Markets Unit.

Civo: CEO Mark Boost and Chief Commercial Officer Simon Hansford criticised the delay in taking action. Hansford stated: “The decision feels like a gesture, not a reset. There is still time to strengthen these proposals before implementation. A truly competitive cloud market benefits everyone in the long run, fostering innovation, attracting investors, and fuelling growth across the digital economy. It’s time for bold action.”

Open Cloud Coalition: Senior Adviser Nicky Stewart told Reuters: “Given the alarming anticompetitive behaviour it has identified, the current plan to start this process in early 2026 is nowhere near sufficient.”

UK Cloud Spending Context

The CMA’s investigation documented the scale of the market at issue. UK customers spent £10.5 billion on cloud services in 2024. Spending had grown by nearly 30% annually since 2020 and was expected to continue rising.

The investigation found that the UK Government itself was heavily dependent on AWS and Microsoft. The CMA noted: “Public sector procurement policy aims to maintain competition from public sector customers, including by requiring competitive tendering of contracts, and greater competition in cloud services would create greater choice for public sector customers. We suggest that the UK Government should continue to monitor the outcomes of public procurement of cloud services and drive best practice in the application of procurement frameworks.”

In September 2025, six weeks after the CMA’s final decision, the UK Government announced a £400 million ($542 million) contract with Google Cloud for sovereign cloud services for the Ministry of Defence, a notable choice given the investigation’s focus on AWS and Microsoft dominance.

The EU Digital Markets Act Investigation

Cloud and the DMA

The Digital Markets Act entered into force on 1 November 2022 and became applicable from 2 May 2023. Unlike traditional competition law, which typically addresses anti-competitive behaviour after it occurs, the DMA is “ex ante” regulation designed to prevent dominant platforms from abusing their position in the first place.

The DMA designates certain large digital platforms as “gatekeepers” based on quantitative thresholds: at least €7.5 billion in annual EU turnover (or €75 billion market capitalisation), and platform metrics such as 45 million monthly active end users and 10,000 yearly active business users. Designated gatekeepers face a catalogue of obligations including requirements for interoperability, prohibitions on self-preferencing, data portability mandates, and bans on tying services together without user consent.

By mid-2025, the Commission had designated several companies as gatekeepers for various services: Alphabet (Google), Amazon, Apple, ByteDance, Meta, and Microsoft. Microsoft was designated as a gatekeeper for Windows PC OS, LinkedIn, and certain advertising services.

Cloud services were not automatically designated under the DMA, but the regulation allows gatekeeper designation through market investigations even where quantitative thresholds are not met.

Cloud computing, however, had not been designated. Neither AWS nor Azure met the DMA’s quantitative thresholds in a way that clearly triggered automatic designation. But the DMA includes a crucial flexibility: the Commission can open market investigations to designate services as gatekeepers even when numerical thresholds do not neatly apply, if the services “function as important gateways for business users to reach end users.”

The November 2025 Investigations

On 18 November 2025, the European Commission announced three market investigations into cloud computing under the DMA.

Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition, stated that the EU wanted the cloud sector “to grow on fair, open and competitive terms.” She added that the Commission would examine whether DMA rules “need to be updated so Europe can keep pace with fast-evolving practices in the cloud sector.”

Henna Virkkunen, Executive Vice-President for Tech Sovereignty, Security and Democracy, emphasised the strategic importance: “Cloud services power Europe’s digital future, enabling AI development and driving innovation.” The investigations would determine whether AWS and Azure qualify as gatekeepers and “how to ensure an effective application of the Digital Markets Act in cloud computing services.”

The Scope of Inquiry

The Commission’s announcement outlined several areas of focus:

• Licensing and Pricing: Are software licence terms or discounts materially tied to running workloads on the provider’s own cloud? Do commercial terms make rival clouds economically unattractive for certain workloads?

• Self-Preferencing: Do hyperscalers advantage their own managed services, marketplaces, or AI stacks in ways that disadvantage independent software vendors or alternative infrastructure providers?

• Interoperability: Are APIs and control-plane interfaces open, documented, and stable enough to permit reliable multi-cloud operations? Where proprietary APIs exist, is there a reasonable migration path?

• Data Access: Do cloud providers restrict business users’ access to their own data in ways that create lock-in or competitive disadvantage?

• Bundling and Tying: Are cloud services bundled or tied together in ways that foreclose competition?

The Commission stated it aims to conclude the gatekeeper designation investigations within 12 months. If designated, AWS and Azure would have six months to bring their services into compliance with DMA obligations. The broader investigation into DMA effectiveness in cloud would produce a final report within 18 months and could lead to updated DMA obligations through a delegated act.

Potential Consequences of Designation

If designated as gatekeepers, AWS and Microsoft would face the DMA’s full obligation set, including:

• No self-preferencing: Prohibition on preferential treatment of their own downstream services

• Interoperability requirements: Enabling forms of technical interoperability and fair access for third-party business users

• Data portability: Ensuring customers can effectively port their data to competing services

• No tying: Prohibition on bundling services in ways that foreclose competition

Non-compliance could result in fines of up to 10% of global annual turnover for a first infringement, and up to 20% for repeated breaches. In extreme cases, the Commission could impose behavioural or structural remedies.

Industry Reactions

Amazon (AWS): Warned that “designating cloud providers as gatekeepers could stifle innovation and raise costs for European companies,” while arguing that the sector remains “dynamic and competitive.”

DMA and Cloud: Uncharted Territory

The DMA was designed for consumer-facing platforms: app stores, search engines, messaging services, social networks. Its obligations address practices like self-preferencing in search results, pre-installing apps, and combining user data across services.

Cloud infrastructure is different. Azure and AWS sell compute, storage, and managed services to businesses, not consumer attention to advertisers. The DMA’s existing obligations were not written with IaaS and PaaS in mind.

The DMA was not designed for cloud infrastructure, which is why the Commission is testing both gatekeeper designation and whether the regulation itself needs to be adapted for cloud markets.

This is why the Commission opened three investigations, not one. Two examine whether Azure and AWS meet the criteria for gatekeeper designation. The third examines whether the DMA itself needs new rules for cloud markets.

The Commission has set a 12-month target for concluding the designation investigations. The separate investigation into whether DMA obligations need updating will produce a report within 18 months, which may propose changes to the regulation through a delegated act.

If the Commission designates Azure as a gatekeeper under existing rules, Microsoft would have six months to comply with DMA obligations. What compliance would mean for a cloud infrastructure service (as opposed to a search engine or app store) remains undefined.

If the Commission concludes that existing DMA obligations are inadequate for cloud markets, any new rules would require the delegated act process, adding further time before changes take effect.

The US FTC Investigation

The Civil Investigative Demand

In late November 2024, reports emerged that the US Federal Trade Commission was preparing to investigate Microsoft’s cloud computing and software licensing practices. The investigation, reportedly approved by then-FTC Chair Lina Khan, represented the most comprehensive federal probe of Microsoft since the landmark 1990s antitrust case that nearly resulted in the company’s breakup.

On 27 November 2024, Reuters and other outlets confirmed that the FTC had sent Microsoft a civil investigative demand, a formal request for information that marked the official opening of an antitrust investigation. The demand reportedly ran to hundreds of pages and covered multiple aspects of Microsoft’s business.

Scope of the Investigation

The FTC’s investigation spans four main areas:

• Cloud Computing and Software Licensing: The investigation examines allegations that Microsoft is abusing its market power in productivity software by imposing restrictive licensing terms that discourage customers from moving data from Azure to competing cloud platforms. The allegations mirror the concerns raised by CISPE in Europe and the findings of the UK CMA.

• AI Partnerships: The FTC is scrutinising Microsoft’s relationship with OpenAI. Since 2019, Microsoft has invested billions of dollars in OpenAI, providing Azure-based infrastructure for the AI company’s operations. Microsoft incorporates OpenAI’s models into its Copilot products and has preferential access to OpenAI’s technology. The investigation examines whether this partnership reduces competition in the AI sector.

• Bundling Practices: The FTC is examining Microsoft’s practice of bundling its Office productivity suite with cybersecurity and cloud computing tools. A ProPublica investigation detailed how, beginning in 2021, Microsoft used this practice to vastly expand its business with the US government while excluding competitors from lucrative federal contracts. The investigation also covers allegations that Microsoft bundles security products with productivity subscriptions in ways that disadvantage standalone security vendors.

• Internal AI Development: The FTC is reportedly examining Microsoft’s decision to scale back its own AI research after investing in OpenAI. The question is whether this reduced competition in the AI field by effectively outsourcing Microsoft’s AI development to a company in which it holds a significant stake.

Historical Parallels

The investigation has drawn explicit comparisons to the 1990s Microsoft antitrust case.

John Lopatka, an antitrust law professor at Penn State who served as a consultant during the 1990s investigation, told media outlets that Microsoft’s current actions follow “a very familiar pattern” that “echoes the Microsoft case” from decades ago. In that case, the government alleged Microsoft had used its Windows monopoly to crush competition from Netscape’s browser and other rivals through bundling and licensing restrictions.

The 1990s case ended with a settlement in 2001, after a federal judge initially ordered Microsoft to be split into two companies. The breakup order was overturned on appeal, and Microsoft agreed to a consent decree limiting certain competitive practices. That decree expired in 2011.

Bipartisan Continuation

Perhaps the most notable aspect of the FTC investigation is its continuation under the Trump administration.

Lina Khan, appointed FTC Chair by President Biden, was widely expected to leave the agency when President Trump took office in January 2025. The new administration appointed Andrew Ferguson as FTC Chair and was expected to take a softer approach toward large corporations.

That expectation proved wrong for Microsoft.

The Microsoft investigation continued across administrations, with antitrust enforcement remaining a stated priority under the Trump-Vance FTC.

In March 2025, Ferguson confirmed that “big tech is one of the main priorities of the Trump-Vance FTC.” Bloomberg reported that FTC staff continued working on the Microsoft investigation under Ferguson’s leadership. He appointed Daniel Guarnera, a former Department of Justice antitrust lawyer who worked on high-profile cases against Google and Apple, as his new head of competition.

FTC staff continued gathering information throughout 2025. One company that received information requests told Bloomberg it had “heard regularly from the FTC” about Microsoft’s licensing practices since the demand was first sent.

Cybersecurity Dimension

In September 2025, Senator Ron Wyden added a new dimension to the investigation by writing to federal regulators about Microsoft’s cybersecurity practices. Wyden characterised Microsoft as “an arsonist selling firefighting services,” suggesting that Microsoft profited from selling security products while its own software vulnerabilities created the security problems customers needed to address.

The letter connected to broader concerns about Microsoft’s security record following high-profile breaches, including the 2023 Storm-0558 incident in which Chinese hackers accessed email accounts of US government officials through vulnerabilities in Microsoft’s cloud infrastructure.

Current Status

As of the end of 2025, the FTC investigation continues with no public enforcement action. There have been no formal charges, no settlement discussions reported, and no indication of when the investigation might conclude.

SAMexpert’s analysis in September 2025 noted: “As of September 2025, there has been a notable lack of public reporting on the investigation’s progress since March. The silence has three likely explanations: the investigation is proceeding confidentially, the FTC has stopped the leaks that plagued the initial disclosure, or investigators are simply digesting the massive amount of information they’ve gathered.”

Wide-ranging antitrust investigations of this type can take years to complete and do not always result in enforcement action. The Google antitrust cases, for comparison, took years to investigate and litigate.

Microsoft’s Response

Microsoft has stated that it is “working cooperatively with the agency.” In December 2024, the company reportedly asked the FTC’s inspector general to examine whether senior management at the agency had disclosed nonpublic information about the investigation, following media leaks about the probe.

The Stasi Class Action: £2 Billion on the Line, Stuck at the Gate

The Claim

While regulators investigated and negotiated, private litigation offered another path to accountability. In December 2024, Italian competition lawyer Dr Maria Luisa Stasi filed a collective proceedings application with the UK Competition Appeal Tribunal (CAT), seeking damages on behalf of UK businesses that allegedly overpaid for Microsoft software due to restrictive cloud licensing practices.

The Stasi case is one of several Microsoft matters before the CAT. ValueLicensing’s case concerns the resale of perpetual licences (covered below), while the Wolfson class action (also covered below) addresses restrictions on second-hand software licensing. Each involves different legal theories and different markets, but together they represent an unprecedented concentration of private litigation against Microsoft’s licensing practices in a single tribunal.

The claim alleged that Microsoft charged higher licence fees for running Windows Server on AWS, Google Cloud, and Alibaba Cloud compared to running the same software on Azure. The differential, according to the claim, could be as much as four to five times the cost. Businesses that chose non-Azure clouds paid more for the same software, effectively penalising them for not choosing Microsoft’s platform.

The Stasi claim alleges that UK organisations paid up to four to five times more to run Microsoft software on non-Azure clouds, covering an estimated 59,000 businesses since 2018.

The claim period covers transactions from December 2018 onwards. The proposed class includes approximately 59,000 UK businesses and organisations.

The Legal Theory

Dr Stasi’s claim advances two main theories of harm:

Inflated Pricing: Microsoft charged higher prices for Windows Server licences when customers ran the software on competing cloud platforms. This differential, the claim argues, constitutes an abuse of dominant market position, forcing customers to pay more than they would in a competitive market.

Re-Licensing Pathway Abuse: The claim alleges that Microsoft created pathways for migrating on-premises licences to Azure that were not equivalently available for migrations to competing clouds. The Azure Hybrid Benefit, for example, allows customers to apply existing Windows Server licences to Azure workloads at reduced cost. No equivalent benefit exists for AWS, Google Cloud, or Alibaba Cloud.

The claim also includes allegations that Microsoft imposed technical limitations or degraded the user experience of Windows Server on rival clouds, though these allegations are contested and would require substantial technical evidence to prove.

Damages Estimate

The proposed damages range from approximately £1.7 billion to £2.1 billion, depending on modelling assumptions and the period covered. The average affected organisation, according to the claimant’s team, suffered losses in the tens of thousands of pounds.

If successful, the claim would be one of the largest antitrust damages awards in UK history.

The December 2025 Hearing

On 11 December 2025, the CAT held a hearing to decide whether to grant a Collective Proceedings Order (CPO). The hearing continued on 16 December 2025. The CPO is a procedural gateway: if granted, the claim can proceed as an opt-out collective action, with qualifying organisations automatically included unless they choose to opt out. If refused, the claim would stall or need to be reframed.

The CAT’s role at this stage is not to determine liability on the merits but to decide whether the claim is suitable for collective treatment.

Dr Stasi’s team argued that the claim met the requirements for certification: common issues of law and fact across the proposed class, a workable methodology for calculating damages, and an appropriate class representative.

Microsoft’s defence focused on attacking the methodology. According to Reuters, the company argued that Stasi’s case “does not set out a proper blueprint for how the tribunal will work out any alleged losses and should be thrown out.”

Key elements of Microsoft’s defence included:

• Heterogeneity: Enterprise licensing involves bespoke discounts, committed spend arrangements, and complex negotiations. No single methodology could capture whether each of 59,000 businesses was harmed and by how much.

• Technical Causation: Allegations of deliberate performance degradation on rival clouds would require detailed technical discovery and granular proof.

• Azure Hybrid Benefit: Microsoft argues that Azure Hybrid Benefit and similar programmes represent legitimate competitive offerings, not abuse of dominance.

Microsoft called the claim “an opportunistic attempt by a law firm and its private funders to piggy-back on baseless complaints Google has made and which we’ve all addressed or rebutted.”

Regulatory Context

The claim benefits from regulatory findings that support its factual narrative. The CMA’s January 2025 provisional findings and July 2025 final decision both identified Microsoft’s licensing practices as harming competition. The CMA found that Microsoft charged higher prices for software on rival clouds and that these practices were “adversely impacting the competitiveness of AWS and Google.”

These regulatory findings are not determinative in the private litigation, but they provide contemporaneous evidence that plaintiffs can cite when arguing that the conduct at issue created anti-competitive effects.

Litigation Funding

The claim is backed by Litigation Capital Management (LCM), a litigation funder that has agreed to indemnify Dr Stasi against adverse costs payable to Microsoft if the claim fails. According to the claimant’s submission, the estimated costs to take the case to trial are £18.4 million.

Dr Stasi’s team argues that “the benefits of continuing the collective proceedings strongly outweigh the costs.”

Awaiting the Ruling

As of early January 2026, the CAT has begun deliberating but has not yet issued its decision on the CPO application. The Tribunal does not provide expected timelines; deliberations typically take weeks to months to conclude.

If the CAT grants certification, the claim will enter disclosure, expert evidence, and complex damages modelling, a process likely to take years. Settlement remains a possibility at any stage.

If the CAT refuses certification, Dr Stasi could attempt to reframe the claim or pursue alternative remedies. Individual businesses could still bring claims independently, though the practical barriers would be substantially higher.

The ValueLicensing Ruling: Microsoft Loses on Licence Resale

While the Stasi class action concerns cloud licensing, a separate case before the same tribunal addressed a different question: can businesses legally resell perpetual Microsoft licences they no longer need?

On 12 November 2025, the Competition Appeal Tribunal ruled unanimously that they can.

How the Case Began

ValueLicensing, a Derby-based reseller of pre-owned software licences, filed suit against Microsoft in 2021. The company alleged that Microsoft had inserted clauses into Enterprise Agreement contracts that prohibited customers from reselling surplus perpetual licences. In exchange for accepting these restrictions, customers received discounts.

ValueLicensing claimed this practice destroyed the secondary market for Microsoft licences, costing the reseller £270 million in lost profits. The company relied on the 2012 UsedSoft judgment from the European Court of Justice, which established that perpetual software licences could legally be resold under the principle of “exhaustion”: once a licence is sold, the copyright holder’s distribution rights are exhausted.

Microsoft initially defended on the basis that its conduct was not abusive and had no appreciable effect on competition. But the company then made what The Register heard described as a “Hail Mary” pivot.

Microsoft’s Copyright Argument

Microsoft argued that Office and Windows contain more than just software code. The products include graphical user interface elements, icons, fonts, clip art, and help files. These elements, Microsoft contended, qualify as “literary and artistic works” covered by the Copyright and Information Society Directive, not the Software Directive that governs exhaustion of software rights.

If correct, this argument would mean that the UsedSoft exhaustion principle, which allows resale of software, would not apply to products containing these creative elements. The entire European market for pre-owned Microsoft licences, Microsoft argued, should never have existed.

ValueLicensing’s CEO Jonathan Horley noted the timing: “It’s a remarkable coincidence that their defence against ValueLicensing has changed so dramatically from being a defence of ‘we didn’t do it’ to a defence of ‘the market should never have existed.’”

The Ruling

The CAT rejected Microsoft’s copyright argument entirely.

In its judgment ([2025] CAT 75), the Tribunal found that the presence of graphical elements such as icons and fonts does not convert software into a copyrighted creative work that restricts resale. Perpetual licences for Windows and Office can legally be resold, and customers holding such licences are free to subdivide and sell portions of their licence entitlements.

The ruling affirmed the principles established in UsedSoft and confirmed that ValueLicensing’s business model was legitimate.

Microsoft stated: “We disagree with the decision and intend to appeal it.”

What Happens Next

The November ruling resolved preliminary issues, not the full case. With Microsoft’s copyright defence dismissed, the £270 million damages claim will now proceed to trial. Microsoft will need to defend on the original grounds: that its contractual restrictions were not anti-competitive.

The ruling has implications beyond ValueLicensing. The Wolfson class action (covered below) makes similar allegations about Microsoft’s restrictions on second-hand software licensing. That case, potentially worth billions, will be watching the ValueLicensing appeal closely.

For enterprise customers, the ruling confirms that perpetual licences remain assets that can be resold. Organisations holding surplus licences from downsizing, cloud migrations, or M&A activity may have more options than Microsoft’s contracts suggested.

The Wolfson Class Action: Billions for End-Purchasers

While ValueLicensing’s claim seeks £270 million in lost profits as a reseller, a separate class action targets the other side of the equation: the customers who allegedly paid inflated prices because Microsoft suppressed the secondary market.

The Claim

In May 2025, barrister Alexander Wolfson filed an opt-out class action with the Competition Appeal Tribunal (case 1731/7/7/25). The claim covers UK-domiciled individuals, businesses, and public bodies that purchased licences for Windows, Office, or Client Access Licences between 1 October 2015 and 12 May 2025.

The potential damages run into billions of pounds.

Legal Representation and Funding

Wolfson is represented by Stewarts, with Kate Pollock (Head of Competition Litigation) leading the team. The case is funded by Harbour Litigation Funding.

Pollock stated: “We’re proud to be supporting Alexander Wolfson in bringing this claim. With our specialist experience in complex competition litigation, we are well placed to help secure justice for the millions affected.”

Microsoft’s Response

Microsoft dismissed the claim as derivative. A spokesperson told The Register: “This new collective action is based on the same unsubstantiated claims regarding second-hand software licensing that have been litigated for several years in another case.”

The “other case” is ValueLicensing. Microsoft’s characterisation is legally accurate but strategically awkward: the ValueLicensing ruling went against Microsoft on the preliminary copyright issues, potentially strengthening Wolfson’s position.

Relationship to ValueLicensing

The two claims are distinct but interconnected:

• ValueLicensing is a standalone damages claim by a reseller. The November 2025 ruling confirmed that perpetual licences can be resold and subdivided, rejecting Microsoft’s copyright defence. The £270 million damages claim proceeds to trial.

• Wolfson is a class action on behalf of purchasers. It must first obtain a Collective Proceedings Order before it can proceed. The ValueLicensing ruling does not bind the CAT in Wolfson’s certification hearing, but it provides persuasive authority on the underlying legal questions.

If ValueLicensing survives Microsoft’s appeal and establishes that Microsoft’s conduct was anti-competitive, Wolfson’s path to damages becomes significantly clearer.

Current Status

As of early January 2026, the Wolfson claim is at the pre-certification stage. The CAT has not yet scheduled a hearing on the Collective Proceedings Order application. The claim’s progress will likely depend in part on the outcome of Microsoft’s appeal in ValueLicensing.

Other Developments

France: The Bing Syndication Investigation

In June 2025, France’s Autorité de la concurrence opened an investigation into whether Microsoft abused its position in search syndication services. Qwant, a French search engine that uses Bing’s index, had complained that Microsoft was disadvantaging its syndication partners.

On 27 November 2025, the Autorité rejected Qwant’s complaint, finding insufficient evidence that Microsoft held a dominant position in the search syndication market. The investigation was closed without action.

Google’s Complaint Withdrawal

In September 2024, Google filed a formal complaint with the European Commission about Microsoft’s cloud licensing practices, arguing that Microsoft charged customers a 400% markup to run Windows Server on rival clouds and provided later and more limited security updates.

On 28 November 2025, Google withdrew its complaint, citing the European Commission’s decision to launch its own DMA investigation into cloud computing. A Google spokesperson indicated the company would focus its evidence and advocacy on the Commission’s investigation rather than pursuing a separate complaint track.

The withdrawal was tactical rather than substantive: the underlying concerns remain, but Google apparently concluded that the DMA investigation offered a more promising path to regulatory action.

Germany: Paramount Significance Designation

Germany’s Federal Cartel Office (Bundeskartellamt) has designated Microsoft as a company of “paramount significance” under German competition law, granting the regulator expanded oversight powers. This designation, which also applies to Alphabet, Amazon, Apple, and Meta, allows the Bundeskartellamt to intervene more quickly against potentially anti-competitive conduct without waiting for full market investigations.

What Actually Changed in 2025?

Looking across all regulatory activity in 2025, the practical changes for enterprise Microsoft customers can be summarised briefly:

Licensing Options

• Teams-inclusive bundles returned globally in November 2025, alongside Teams-exclusive alternatives

• Organisations can now choose bundled or unbundled suites; the pricing arithmetic makes them economically equivalent for Teams users

• EEA customers on multi-year contracts can switch between Teams-inclusive and Teams-exclusive options at annual order period through 2030

Pricing

• Unbundled “no Teams” suite prices dropped significantly (up to 44% for O365 E3)

• Teams standalone rose to $8.55 for Enterprise customers

• Bundled suite prices remain unchanged from pre-unbundling levels

• Net effect: organisations using Teams pay the same as before; organisations not using Teams pay less

• Discount parity: Microsoft cannot offer better discounts on bundled suites than unbundled

• Cloud licensing premiums for non-Azure deployments remain unchanged for AWS, Google, and Alibaba customers

Technical Restrictions

• Entra ID dependency for Microsoft 365 remains

• Windows 10/11 VDI multi-session still unavailable on non-Azure multi-tenant infrastructure

• Egress fees and switching barriers identified by CMA remain in place

• Improved data portability from Teams (10-year commitment) may ease future switching

Regulatory Outcomes

• No fines imposed on Microsoft by any regulator in 2025

• No binding remedies imposed by any regulator in 2025

• Investigations ongoing: FTC (US), DMA (EU), SMS consideration (UK)

• Class actions pending: Stasi v Microsoft (UK CAT, cloud licensing), Wolfson v Microsoft (UK CAT, second-hand licensing)

• ValueLicensing v Microsoft: CAT ruled in November 2025 that perpetual licences can be resold; Microsoft appealing; £270m damages case proceeds

After All That…

2025 produced investigations, hearings, provisional findings, final decisions, settlements, and withdrawn complaints. For enterprise customers, the practical changes were limited to Teams unbundling options and pricing adjustments.

Ongoing matters include the EU DMA investigation, UK SMS designation process, FTC investigation, and the Stasi, Wolfson, and ValueLicensing cases before the UK Competition Appeal Tribunal.

The licensing framework that existed at the start of 2025 remains largely intact at the start of 2026.

🖐 Get independent guidance on licensing exposure, dispute patterns, and defensible positions. Learn more: Microsoft Licensing Services for Enterprises.

Regulatory pressure on Microsoft’s licensing practices is mounting, but the practical impact on enterprise customers remains unclear. If you need help with Microsoft licensing, get in touch. We don’t sell Microsoft licences or cloud services, so our advice is independent.