Wouldn't another way of saying that be "the Copilot development team is leveraging their Microsoft ownership to create products in a way not available to the general marketplace?"
The goal might not be to squash competition, but blessing one client with special treatment not available to others can still be anti-competitive.
Whether that would fall afoul of any regulation is beyond my expertise. Naively, most companies have internal APIs that are not generally available. But then most companies don't have paid public marketplaces on their platform.