Microsoft is facing a significant lawsuit in the UK, which claims that businesses utilizing cloud services from competitors like Amazon, Google, and Alibaba may be overpaying for Windows Server licenses. Filed by competition lawyer Maria Luisa Stasi at the Competition Appeal Tribunal, the lawsuit argues that British companies could collectively seek over £1 billion (approximately $1.27 billion) in compensation.
Stasi contends that Microsoft’s licensing practices discourage the use of alternative cloud providers by imposing higher fees. "Put simply, Microsoft is punishing UK businesses for using Google, Amazon, and Alibaba by forcing them to pay more for Windows Server," she stated. The lawyer suggests that Microsoft is attempting to funnel customers toward its own cloud service, Azure, thereby limiting competition in the sector.
This lawsuit emerges amid ongoing scrutiny from the UK’s competition regulator, which is analyzing the cloud computing market dominated by Amazon Web Services (AWS), Microsoft’s Azure, and Google Cloud Platform. The investigation assesses Microsoft’s licensing strategies for products, including Windows Server and Microsoft 365.
In 2020, Microsoft had implemented new licensing fees for running its software on major cloud providers, and the claim suggests this move was intended to steer customers toward using Azure. Reports from the UK’s Competition and Markets Authority indicate that since these licensing changes, Microsoft has been securing customers at a significantly greater rate than other cloud service providers.
Additionally, the United States Federal Trade Commission (FTC) has recently launched an antitrust investigation into Microsoft, focusing on allegations that the company has been wielding its market power to impose unfavorable licensing conditions and prevent customers from migrating to competitor platforms.