Microsoft hit with £1 billion lawsuit over claims it’s “punishing UK businesses” for using competitor cloud services

Microsoft is facing a £1 billion lawsuit in the UK over claims that it's been overcharging customers for using rival cloud platforms.

Those using Amazon Web Services (AWS), Google Cloud Platform (GCP) or Alibaba Cloud rather than Microsoft Azure, it claims, were charged higher licensing fees for Windows Server.

Customers licensing Windows Server via AWS, Google Cloud Platform, or Alibaba are subject to the Services Provider License Agreement (SPLA). The lawsuit alleges users face differences in price and quality compared with the Microsoft Azure licensing deal.

The case has been filed in the UK’s Competition Appeal Tribunal by Dr Maria Luisa Stasi, a competition law and digital markets regulation expert, through the disputes resolution law firm Scott+Scott.

"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,” 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 behavior, push them to reveal exactly how much businesses in the UK have been illegally penalized, and return the money to organisations that have been unfairly overcharged."

According to Stasi, many thousands of businesses and organizations in the UK are likely to have been affected by the charges, with small businesses hit particularly hard.

Microsoft’s cloud computing practices, including those addressed in the claim, are already under investigation in the UK and elsewhere.

Communications regulator Ofcom, for example, last year referred the company to the Competition and Markets Authority (CMA), saying it was concerned that "cloud providers are using their strong position in software products to distort competition". A ruling is likely next summer.

Similarly, earlier this year Microsoft paid €20 million to CISPE to settle an antitrust complaint about its cloud computing licensing practices, thus avoiding an EU antitrust investigation.

It also promised to make changes to some of its software licensing practices within nine months.

"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 James Hain-Cole, partner at Scott+Scott.

"Dr Stasi’s case against Microsoft aims to do exactly that. We are proud to support her efforts to secure compensation for the class and hold Microsoft to account for its conduct that affects businesses and organisations across the UK economy."