Microsoft is currently embroiled in a significant legal battle in the United Kingdom, facing allegations of anti-competitive practices related to its cloud licensing policies. The lawsuit, filed in December 2024, accuses the tech giant of overcharging UK businesses for using its Windows Server software on rival cloud platforms, potentially leading to over £1 billion in compensation claims.
Background of the Lawsuit
The legal action was initiated by competition lawyer Dr. Maria Luisa Stasi, who filed the claim with the UK's Competition Appeal Tribunal. The lawsuit alleges that Microsoft imposed higher licensing fees on businesses that chose to run Windows Server on competing cloud services such as Amazon Web Services (AWS), Google Cloud Platform (GCP), and Alibaba Cloud. This practice is claimed to have pressured organizations into migrating to Microsoft's own Azure cloud platform, thereby restricting competition in the sector.Dr. Stasi stated, "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." She further emphasized that the lawsuit aims to challenge Microsoft's alleged anti-competitive behavior and seek compensation for affected organizations.
Allegations of Anti-Competitive Behavior
The core of the allegations centers on Microsoft's licensing practices, which purportedly make it more expensive for businesses to use Windows Server on non-Microsoft cloud platforms. Specifically, the lawsuit claims that:- Pricing Disparity: Businesses using AWS, GCP, or Alibaba Cloud are charged higher fees for Windows Server licenses compared to those using Microsoft's Azure.
- License Restrictions: Organizations with on-premise licenses for Windows Server can use the software on Azure without additional fees but must pay extra to use it on competing cloud platforms.
Regulatory Scrutiny and Previous Settlements
Microsoft's cloud licensing practices have been under regulatory scrutiny both in the UK and internationally. In October 2023, the UK's communications regulator, Ofcom, referred Microsoft and other cloud providers to the Competition and Markets Authority (CMA) for investigation, citing concerns that data transfer fees and other market features could hinder customers from switching suppliers or using multiple suppliers.In Europe, Microsoft reached a €20 million settlement with the Cloud Infrastructure Service Providers in Europe (CISPE) in July 2024, addressing similar complaints about its cloud licensing practices. As part of the settlement, Microsoft agreed to develop a product that enables CISPE members to run Microsoft software on their platforms at prices equivalent to those on Azure.
Implications for UK Businesses
The outcome of this lawsuit could have significant implications for thousands of UK businesses that have used Windows Server on non-Microsoft cloud platforms. If the claim is successful, affected organizations may be entitled to substantial compensation, potentially exceeding £1 billion collectively. Moreover, a ruling against Microsoft could prompt changes in its licensing practices, fostering a more competitive cloud computing market in the UK.As the case progresses, it will be closely watched by industry stakeholders and regulatory bodies, given its potential to reshape the competitive landscape of cloud computing services.
Source: Computing UK https://www.computing.co.uk/news/2025/cloud/microsoft-july-25-deadline-cloud-licencing-lawsuit/
