"For years, Microsoft's practices have had real financial impact on both public and private organizations" – Microsoft faces new legal challenge over licensing practices

Microsoft's facing a £2 billion lawsuit in the UK over its cloud computing and software licensing practices.

A lawsuit brought by competition lawyer Maria Luisa Stasi on behalf of nearly 60,000 businesses alleges that the company has been overcharging UK organizations that use its Windows Server on rival cloud services.

And the Competition Appeal Tribunal (CAT) has now ruled that the case can go ahead, dismissing Microsoft's arguments and saying that the case 'comfortably crosses the hurdle of having a real prospect of success'. It's granted a Collective Proceedings Order (CPO) on an opt-out basis.

"Today's ruling is an important moment for the thousands of organizations impacted by Microsoft's conduct and in ensuring that a critical sector of the economy is innovative and open," said Stasi.

"For years, Microsoft's practices have had real financial impact on both public and private organizations. I'm now looking forward to preparing for trial and getting their money back on their behalf."

The lawsuit alleges that customers using Amazon Web Services (AWS), Google Cloud Platform (GCP) or Alibaba Cloud, rather than Microsoft Azure, were charged higher licensing fees for Windows Server.

The Services Provider License Agreement (SPLA), it said, also offers lower quality services than the Microsoft Azure licensing deal.

"We are very pleased with the Tribunal's decision, including its confirmation that Dr Stasi's action should proceed on an opt-out basis, as sought in her application," said James Hain-Cole, partner at law firm Scott+Scott, which is leading the case.

"Certification of this claim is a pivotal step in securing compensation for thousands of businesses and organisations. The decision illustrates the importance of the regime for UK businesses who, like consumers, require and deserve the access to justice that it was designed to offer."

Microsoft, which has claimed that its business model improves competition, said it planned to appeal against the CAT's decision.

This case is one of many challenging Microsoft's licensing practices. Last month, the UK Competition and Markets Authority (CMA) said it planned to open a strategic market status investigation in May, covering the firm's licensing practices in relation to Microsoft 365.

In November last year, the European Commission announced another investigation to assess whether Microsoft should be designated as a 'gatekeeper' for its cloud computing services under the Digital Markets Act (DMA), despite not technically meeting the DMA gatekeeper thresholds for size, user number, and market position.

And last summer, the firm settled a $22 million case with cloud industry group Cloud Infrastructure Service Providers in Europe (CISPE) that claimed customers on non-Azure platforms were paying a 20% surcharge on Microsoft software. Other investigations have been launched over the last year in Brazil, Switzerland, the US, and Japan.