Microsoft Faces Massive Legal Claim Over Cloud Computing Pricing
A significant legal claim has been filed against Microsoft, alleging the tech giant has overcharged thousands of UK businesses for Windows Server software used in cloud computing. Regulation expert Dr. Maria Luisa Stasi is seeking compensation exceeding £1 billion on behalf of UK organizations.
The lawsuit is structured as an “opt-out” class action, meaning all UK organizations are automatically included unless they choose to exclude themselves. This legal action is part of a growing trend of class-action lawsuits against major tech companies in the UK’s Competition Appeal Tribunal.
Cloud computing, which involves storing and accessing data online, has become crucial to modern business operations. Companies typically use platforms like Microsoft’s Azure or work with alternative providers such as Amazon and Google, who may license software from Microsoft.
The core of the legal claim centers on Microsoft’s licensing practices. Dr. Stasi argues that Microsoft is “punishing” businesses for using alternative cloud computing services by forcing them to pay higher prices for Windows Server. She alleges that this strategy is designed to push customers towards Microsoft’s Azure platform and restrict market competition.
This claim is supported by previous statements from other tech giants. In June, Google told the UK’s Competition and Markets Authority (CMA) that Microsoft’s licensing practices raise rivals’ costs and weaken their competitive ability. Microsoft has denied these allegations, asserting that its licensing terms do not significantly increase cloud rivals’ costs.
The lawsuit suggests that small businesses are particularly vulnerable, referencing Office for National Statistics data showing more businesses closed than started in 2022. Dr. Stasi stated that the legal action aims to challenge Microsoft’s “anti-competitive behaviour” and compel the company to reveal the extent of potential overcharging.
While class action lawsuits of this nature are relatively new in the UK, having been introduced in 2015, this case could have significant implications for the tech industry. However, due to the complexity of such legal proceedings, a resolution could take years.
The lawsuit coincides with an ongoing CMA investigation into the cloud computing industry in the UK. Cloud computing has become integral to modern business operations, used for diverse purposes ranging from data storage to video and music streaming.
If successful, the lawsuit could result in substantial payouts for thousands of UK businesses and potentially reshape how large tech companies approach software licensing and cloud computing services.
Microsoft has been approached for comment, and the tech industry will be watching this case closely as it develops through the UK’s legal system.
