Microsoft is facing allegations of anti-competitive behavior in a lawsuit seeking over £1 billion in damages in the United Kingdom.
The lawsuit accuses the tech giant of overcharging customers of rival cloud companies for its Windows Server software, compelling them to use Microsoft’s Azure platform instead.
Key Allegations
- Licensing Costs: The lawsuit claims customers using Amazon Web Services (AWS), Google Cloud Platform, or Alibaba Cloud pay higher fees to license Microsoft’s Windows Server software compared to those using Azure.
- Market Dominance: Microsoft is accused of leveraging its dominant position in the cloud-based server operating system market to impose higher prices and encourage migration to Azure.
- Unfair Practices: According to the claimant, Maria Luisa Stasi, Microsoft’s pricing structure unfairly penalizes UK businesses and organizations that choose rival cloud providers.
Claimant’s Statement
Maria Luisa Stasi, a competition lawyer and head of law and policy at the digital rights group Article19, stated:
“Put simply, Microsoft is punishing UK businesses and organisations for using Google, Amazon and Alibaba for cloud computing by forcing them to pay more money for Windows Server.
By doing so, Microsoft is trying to force customers into using its cloud computing service Azure and restricting competition in the sector.”
The lawsuit aims to:
- Challenge Microsoft’s allegedly anti-competitive behavior.
- Compel the company to disclose how much UK businesses have been overcharged.
- Secure compensation for affected organizations.
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Collective Action Details
The lawsuit is filed as an “opt-out” collective action, automatically including all potentially affected UK businesses and organizations.
If successful, thousands of companies could receive compensation without needing to actively join the case.
Broader Context
The lawsuit coincides with an investigation by the U.K.’s Competition and Markets Authority (CMA) into anti-competitive practices in the cloud computing sector.
The CMA is preparing behavioral remedies to address these issues, with a provisional decision expected in the coming weeks.
A final deadline for the investigation is set for late 2024.
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Previous Settlements
Earlier this year, Microsoft settled a separate EU antitrust complaint for €20 million ($21 million) with the cloud trade body CISPE.
The complaint also involved allegations of unfair software licensing practices.
Potential Implications
The case underscores growing scrutiny of major cloud providers’ practices and could set a significant precedent for competition in the cloud computing industry.
If the lawsuit succeeds, it may prompt broader regulatory and legal challenges against Microsoft and other dominant players.
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Looking Ahead
With thousands of businesses represented, the lawsuit could have far-reaching implications for the cloud computing sector.
Microsoft has not commented on the case, but the outcome could influence future licensing policies and competition dynamics in the industry.
