Software licensing and the UK’s cloud services market investigation: a missed opportunity to remedy anticompetitive practices?

What the paper says

Cloud services have rapidly established themselves as a crucial resource for numerous economic operators globally, including those operating within the UK economy. In 2023, Ofcom referred UK public cloud infrastructure services markets to the Competition and Markets Authority (CMA) for a market investigation. Accordingly, the CMA was tasked with assessing whether ‘any feature, or combination of features’ of markets in the supply of public cloud infrastructure services ‘prevents, restricts or distorts competition’ in connection with the supply of cloud services in the UK or a part thereof. The CMA’s market investigation focused on several key issues, including software licensing. The CMA adopted its Final Decision Report on 31 July 2025; it found that there are adverse effects on competition in the UK cloud services markets, and it set out remedies to address these effects. This article focuses on the CMA market investigation into cloud services, specifically its evaluation of Microsoft’s software licensing practices. It seeks to determine whether, with the publication of its Final Decision Report, the CMA has missed an opportunity to remedy in a timely manner practices that are harming competition in a crucial sector of the UK economy. Ultimately, this article argues that the remedial approach outlined in the CMA’s Final Decision Report is far from ideal and should not have been adopted by the CMA. Instead, FRAND-based remedies should have been adopted to address the pricing practices and supply policies of Microsoft that the CMA found were harmful to competition.