Microsoft is facing a £1 billion lawsuit in the UK, accused of overcharging businesses for Windows Server licenses used on non-Microsoft cloud platforms like Amazon Web Services (AWS), Google Cloud Platform (GCP), and Alibaba Cloud. The lawsuit, filed with the UK’s Competition Appeal Tribunal, represents thousands of UK businesses that allegedly paid inflated prices for these licenses compared to those using Microsoft’s Azure platform.
The legal action, led by competition lawyer Maria Luisa Stasi from Scott+Scott, claims that Microsoft’s pricing practices unfairly penalize UK businesses that opt for alternative cloud providers. “Microsoft is punishing UK businesses by forcing them to pay more for Windows Server licenses when using services like Google, Amazon, and Alibaba,” Stasi said. The lawsuit seeks compensation for the overcharges, which allegedly were significant enough to make switching to Azure a more cost-effective option for many companies.
Although specific details of the overcharges are still under review, Scott+Scott argued that Microsoft is exploiting its dominance in the desktop operating system market—holding a 70% to 80% share, according to the UK’s Competition and Markets Authority (CMA)—to charge higher prices for software on competing clouds.
This lawsuit adds to a series of legal issues Microsoft has faced over its cloud pricing. In October 2023, UK regulator Ofcom referred Microsoft and Amazon to the CMA for potential anti-competitive practices, particularly related to discriminatory pricing on non-Azure clouds. Microsoft also settled with the Cloud Infrastructure Service Provider of Europe (CISPE) in 2024 for unfair licensing fees.
In September 2024, Google filed its own complaint with the European Commission, accusing Microsoft of marking up prices by as much as 400% for Windows Server on GCP and other non-Microsoft clouds. The status of that case remains unclear.
Industry experts have called for action against Microsoft’s pricing practices, with Nicky Stewart from the Open Cloud Coalition urging that such policies harm competition. In response to growing criticism, Microsoft announced a 5-6% price reduction for its UK services due to currency fluctuations.
This lawsuit could have significant consequences for Microsoft’s licensing strategy, as it faces increasing scrutiny from businesses and regulators alike over its cloud pricing practices.
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