In Competition… Competition & Public Procurement Law: May 2026 Update
June 2026Welcome to the tenth edition of In Competition.
If April was about regimes moving into force, May was about regulators showing how they intend to use them. The CMA opened its first Strategic Market Status investigation outside the search and mobile space, turning the Digital Markets, Competition and Consumers Act on Microsoft. It also delivered the findings of its civil engineering market study, concluding that the way the UK procures road and rail is leaving billions of pounds of value on the table each year, a direct read-across for anyone bidding for, or running, public infrastructure work.
On the policy side, the King’s Speech placed infrastructure and a “regulate for growth” agenda at the centre of the legislative programme, giving the CMA’s interventions a clear political tailwind. At EU level, the assimilated and EU technology transfer regimes settled into force, and reports emerged of a record Digital Markets Act fine for Google. In procurement, the courts handed down the first judgment under the Procurement Act 2023: a decision on the automatic suspension that looks markedly more bidder-friendly than the regime it replaced.
Digital Markets and Competition Enforcement
CMA opens Strategic Market Status investigation into Microsoft’s business software (14 May 2026)
On 14 May 2026 the CMA launched an initial investigation under Part 1 of the DMCCA2024 into whether Microsoft holds Strategic Market Status (SMS) in its business software ecosystem: the productivity and database software on which most UK organisations run. The CMA issued an invitation to comment the same day, which subsequently closed on 4 June 2026. The central concern is whether Microsoft makes it harder to integrate rival products with its own, the alternatives to using Microsoft, and customers’ ability to switch to alternatives, and how this may limit UK customers’ ability to access the best tools at competitive prices.
Why does this matter?
This is the first time the CMA has pointed the SMS regime at enterprise software rather than consumer-facing search or mobile platforms, signalling that no large digital incumbent serving UK businesses should assume it sits outside the regime. The statutory thresholds are high (broadly, global turnover above £25 billion or UK turnover above £1 billion, plus substantial and entrenched market power) but for firms that clear them, designation brings conduct requirements on fair dealing, interoperability and transparency, and the possibility of forward-looking pro-competition interventions. For construction and engineering businesses, much of the sector’s design, BIM and project-management stack sits on the affected software, so interoperability outcomes here could shape procurement choices and switching costs for years. For insurers and financial services firms, the same interoperability questions feed directly into product capability and the cost of changing core systems. The real test will be monitoring and escalation rather than the headline designation.
CMA civil engineering market study: a “fundamental reset” of road and rail procurement (21 May 2026)
On 21 May 2026 the CMA published the findings of its civil engineering market study, examining whether the market for public road and rail infrastructure is working well. The study covered roughly £19 billion of public expenditure in 2023/24 (excluding HS2). The CMA concluded that the market is systematically underperforming (costs high and rising in real terms, frequent cost and time overruns, variable quality and constrained innovation) and estimated achievable efficiency savings of 10–25%, or around £2 to £5 billion a year.
The CMA attributed the problems largely to how public procurement is structured: fragmentation across hundreds of bodies, short-term funding cycles frustrating long-term planning, barriers to entry for smaller firms, capability gaps in procuring authorities and poorly allocated risk. It made 19 recommendations grouped around strategic ownership (with HM Treasury driving system-wide change and the National Infrastructure and Service Transformation Authority coordinating), a published strategic sector plan with annual reporting, credible multi-year pipelines (minimum three-year capital budgets), mandatory Construction Playbook compliance and design standardisation, building public-sector capability, and reducing regulatory barriers. The Government has committed to respond within 90 days, and the CMA has flagged that the lessons may extend beyond road and rail to other infrastructure sectors.
Why does this matter?
For construction and engineering this is the most consequential UK competition development of the month. The CMA has, in effect, diagnosed public procurement itself as the cause of poor market outcomes and prescribed procurement reform as the remedy. Contractors and procuring authorities should audit their current alignment with the Playbook now, because what is recommended today may be mandated tomorrow. The 90-day response window is a genuine opportunity to shape implementation through direct submissions or trade-body engagement, and firms in water, energy and digital infrastructure should watch closely given the CMA’s signal that principles may travel. For insurers and funders, a shift towards multi-year pipelines and standardised risk allocation should, over time, make infrastructure risk more legible and more consistently priced.
UK Competition Policy
The King’s Speech and the CMA’s growth mandate (13 May 2026)
The King’s Speech, delivered on 13 May 2026, put infrastructure and growth at the centre of the legislative programme, with the statement that “the United Kingdom’s economic security depends upon world class infrastructure”. The programme included measures to build roads at pace (the Highways (Financing) Bill), to deliver Northern Powerhouse Rail, and to cut regulatory burdens and accelerate innovation (the Regulating for Growth Bill). This sits alongside the Government’s strategic steer to the CMA and the regulator’s own 2026–2029 strategy, which frame competition work as a means to real-world outcomes rather than an end in itself.
Why does this matter?
The significance is alignment. The CMA’s market interventions, the Government’s legislative agenda and the regulator’s restated mandate now point in the same direction, suggesting reform momentum will be stronger and faster than past attempts. The “regulate for growth” framing cuts both ways: lighter-touch process and lower barriers to entry in priority sectors, but also a more interventionist, outcome-focused CMA willing to use its markets tools to reshape how sectors operate. Construction, engineering and energy businesses should treat the legislative programme as a signal of where investment, deregulation and procurement reform will be concentrated.
EU Competition Policy
Technology Transfer Block Exemption regimes settle into force (1 May 2026)
The EU’s revised Technology Transfer Block Exemption Regulation and accompanying Guidelines, adopted on 16 April 2026, with their main changes addressing data licensing agreements and licensing negotiation groups, entered into force. In the UK the assimilated TTBER expired on 30 April 2026 and the Government’s replacement Block Exemption Order takes its place, largely preserving the existing safe harbour with limited, UK-tailored changes.
Why does this matter?
Any business licensing patents, software copyright or know-how should now be working to the new texts rather than the expired ones. Companies licensing into the EU are directly affected, while UK-only businesses need to track the EU position because it sets the benchmark against which the UK will align or diverge. The recurring trap is misclassifying technology transfer arrangements as ordinary vertical agreements and applying the wrong principles. For construction and engineering, anything touching BIM ecosystems, digital twins or software-enabled assets should be reviewed against both the exemption thresholds and the revised data-licensing guidance.
Public procurement law
Parkingeye v Velindre: the first judgment under the Procurement Act 2023 (1 May 2026)
On 1 May 2026, Judge Keyser KC handed down judgment in Parkingeye Ltd v Velindre University NHS Trust & Anor [2026] EWHC 1019 (TCC). This is the first judicial decision under the Procurement Act 2023, and the first application of the new test under section 102(2) for lifting an automatic suspension. Parkingeye, the incumbent provider of car park management services across certain NHS sites, was unsuccessful in a re-procurement (estimated value £10–20 million) and issued proceedings within the standstill period, triggering the automatic suspension under section 101. Two NHS contracting authorities applied to lift the suspension.
The court dismissed both applications. The key point is the change of approach: under the Public Contracts Regulations 2015 and the American Cyanamid test, analysis turned heavily on whether damages would be an adequate remedy, and suspensions were routinely lifted because loss of a commercial contract usually could be compensated by damages. Under the new regime, the court held that public interest will generally favour maintaining the suspension. On the facts the court accepted that damages would be an adequate remedy for Parkingeye, yet still refused to lift the suspension because the authorities had not evidenced a persuasive countervailing public interest or overriding private interest.
Why does this matter?
This is a landmark first read of the Procurement Act, tilting the balance towards bidders. Challengers can expect a realistic prospect of holding a suspension in place to trial, rather than being relegated almost automatically to a damages claim. This changes the strategic calculus on both sides. Contracting authorities will need to build a properly evidenced public-interest case for lifting a suspension at the outset, rather than relying on adequacy of damages; vague assertions of delay or inconvenience are unlikely to suffice. Suppliers gain more leverage to pause an award they intend to challenge but should note the court’s reasoning is fact-sensitive. Much remains untested, including the section 12 objectives, the standard of review on evaluation and margin of discretion, modifications, exclusions and direct awards, and authorities and bidders alike should monitor the next decisions closely. Insurers writing public-sector and contractor risk should factor in longer suspension periods and more sustained challenges before contracts can be concluded.
Procurement as a growth and industrial-policy lever
May reinforced a theme tracked through recent editions: procurement is increasingly being used as an instrument of industrial and growth policy rather than a neutral purchasing process. The civil engineering market study’s recommendations sit squarely alongside the King’s Speech’s infrastructure and “regulate for growth” agenda and the continuing progression of measures aimed at British goods, services and working practices.
Why does this matter?
The direction of travel is now unmistakable: align with the Construction Playbook, prepare for longer-horizon pipelines, and expect procurement decisions to be measured against growth, resilience and value objectives rather than lowest price. The 90-day Government response to the civil engineering study is the near-term inflection point to watch. For insurers and funders, contract terms and KPI structures are likely to align more tightly with national resilience and growth objectives, which will shift risk allocation and the way performance is monitored and reported.
Concluding thoughts
May 2026 brought three themes into focus. First, the UK’s digital and markets toolkit is being used with growing confidence and breadth as the SMS regime has reached mainstream enterprise software. Second, the civil engineering study shows the CMA are willing to diagnose and prescribe reform for an entire procurement system. Third, competition and procurement policy are converging on a single growth-and-resilience agenda, with the King’s Speech supplying the political framing and the CMA the analytical engine. The courts have begun to fill in the Procurement Act 2023, and the first decision suggests the new automatic-suspension test will be more hospitable to challengers than the regime it replaced. Procuring authorities and bidders should price for this shift in their strategies now.
If you would like to discuss any of the issues raised in this update, please contact Paul Henty and Charlie Bayliss.
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