Microsoft hit with £1bn UK legal claim over ‘anti-competitive’ cloud licensing tactics

 Microsoft has found itself on the receiving end of £1bn legal action, filed on behalf of thousands of UK businesses that were allegedly over-charged for running its Windows Server software in its competitors’ cloud environments.

The action has been filed by competition lawyer Maria Luisa Stasi and her legal team at complex disputes resolution firm Scott+Scott with the UK’s Competition Appeal Tribunal.

 It is claimed that UK firms could be owed more than £1bn in compensation because of Microsoft’s controversial cloud licensing tactics, which have been the subject of scrutiny by competition regulators and trade organisations across the UK and Europe for some time now.

Specifically, Stasi and her team allege that UK businesses were charged more for running the Windows Server software in cloud environments hosted by Microsoft’s main public cloud rivals, namely Amazon Web Services (AWS), Google Cloud Platform and Alibaba Cloud.

“All UK businesses and organisations that bought licences for Windows Server via Amazon’s AWS, Google Cloud Platform, and Alibaba Cloud may have been overcharged and will be represented in this new ‘opt-out’ collective action,” said Stasi’s representatives in a statement.

An opt-out collective action makes it possible for a class actions such as this to proceed against a company like Microsoft without first needing to get those allegedly affected by the allegations involved and on-side first.

In a statement, Stasi said the lawsuit aims to “challenge Microsoft’s anti-competitive behaviour” for the benefit of all UK business and organisations who have found themselves paying more to access the same software just because they choose to run it in someone else’s cloud.

“Put simply, Microsoft is punishing UK business and organisations for using Google, Amazon and Alibaba for cloud computing by forcing them to pay more money for Windows Server,” said Stasi. “By doing so, Microsoft is trying to force customers into using its cloud computing service, Azure, and restricting competition in the sector.

“This lawsuit aims to challenge Microsoft’s anti-competitive behaviour, push them to reveal exactly how much businesses in the UK have been illegally penalised, and return the money to organisations that have been unfairly overcharged.”

Computer Weekly contacted Microsoft for a response to the news of this legal claim, but a representative for the company said that it has no comment to make at this time.

Scott+Scott partner James Hain-Cole said that the company is proud to be supporting Stasi in her efforts to “secure compensation” for those affected and “hold Microsoft to account” for its conduct.

“Collective actions level the playing field and allow organisations to fight back against anti-competitive behaviour from some of the biggest companies in the world,” said Hain-Cole. “[This] case against Microsoft aims to do exactly that.”

News of the legal action comes after Google filed a complaint with the European Commission (EC) over Microsoft’s cloud licensing practices in September 2024, and several months after the software giant reached a $22m settlement with the Cloud Infrastructure Service Providers in Europe (CISPE) trade body that resulted in it dropping a similar complaint against Microsoft with the EC.