Microsoft Hit With £1B UK Lawsuit For Overcharging Businesses Using Windows Server on Rival Cloud Platforms

A class-action lawsuit seeking £1 billion in damages has been filed against Microsoft in the UK.

Lodged in the Competition Appeal Tribunal, the lawsuit accuses the tech giant of overcharging businesses for Windows Server licenses when they were using rival cloud platforms like Amazon AWS, Google Cloud, and Alibaba Cloud. 

The suit alleges that customers using these competitors were forced to pay higher fees for Microsoft’s software than those using Microsoft’s own Azure cloud services.

This lawsuit adds to the issues surrounding the cloud computing market, particularly the pricing of tech giants like Microsoft. Recent developments have seen the U.S. Federal Trade Commission launch an antitrust investigation into Microsoft’s software and cloud computing divisions. 

Similarly, the UK’s Competition and Markets Authority (CMA) has been investigating the cloud services market, with a particular focus on Amazon and Microsoft. 

The CMA’s investigation, which follows a referral from the communications regulator Ofcom, is still ongoing, with no final report expected until next year.

In Europe, Microsoft has already had some settlements over similar accusations. In July 2023, the company reached a €20 million settlement with the cloud services trade association CISPE, resolving an antitrust complaint filed by the EU. 

This settlement, though smaller in comparison to the £1 billion sought in the UK lawsuit, has likely led to further litigation, as financial settlements often attract the attention of legal funders.

The UK lawsuit is being funded by Litigation Capital Management (LCM), a global dispute finance provider, and is spearheaded by Dr Maria Luisa Stasi, an expert in competition law. 

Dr Stasi claims that Microsoft’s actions are designed to push UK businesses towards its Azure platform, stifling competition by penalising customers using other cloud services. 

According to her, the lawsuit will demand Microsoft disclose the extent of the overcharging and seek compensation for businesses that were allegedly harmed by these practices.

The legal proceedings are expected to include thousands of UK-based businesses that are automatically included in the suit unless they choose to opt-out. 

No upfront costs are required from these businesses, and they stand to gain compensation if the lawsuit succeeds. Microsoft has yet to respond to the allegations.

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