A high‑stakes, potentially precedent‑setting legal push against Microsoft over its cloud licensing policies is gathering momentum in the UK: competition lawyer Dr Maria Luisa Stasi is pressing a proposed collective claim worth roughly £2 billion that alleges thousands of UK organisations were overcharged for running Windows Server on rival cloud platforms, and the Competition Appeal Tribunal will hear whether that action can proceed as a collective case in December.
The dispute sits at the intersection of software licensing, cloud economics and competition law. At issue is the price and availability of Microsoft server software — most notably Windows Server — when run on third‑party infrastructure such as Amazon Web Services (AWS), Google Cloud Platform (GCP) and Alibaba Cloud, compared with running the identical workloads on Microsoft’s own Azure cloud. Dr Stasi’s claim, filed in the Competition Appeal Tribunal (CAT), argues that Microsoft’s contractual and commercial licensing practices have made it materially more expensive for businesses to use those rival clouds, effectively penalising choice and favouring Azure.
Those allegations did not arise in a vacuum. The UK’s Competition and Markets Authority (CMA) concluded a lengthy market review in mid‑2025 that found Microsoft’s licensing and related practices have harmed the competitiveness of rival cloud providers in the UK and produced significant price and quality differences for customers. The CMA’s findings have been widely reported and have intensified regulatory and commercial scrutiny of cloud licensing across Europe.
The proposed class representative estimates the group of affected UK organisations could be collectively owed about £2 billion — a figure that underpins the urgency in recruiting further claimants and in preparing for the CAT’s December procedural hearing to decide whether a Collective Proceedings Order (CPO) should be granted. If certified, the action would consolidate multiple UK claimants into a single collective enforcement vehicle under competition law.
A CPO is a procedural gatekeeper: the CAT will assess whether the claim is suitable for collective proceedings, whether the proposed class representative is appropriate, and whether there is a coherent and manageable common methodology for proving liability and quantifying loss across thousands of businesses. The December hearing will focus on those certification issues, not the merits of the abuse or the calculation of damages.
Separately, Google formally lodged a complaint with the European Commission in 2024, documenting similar allegations about Microsoft’s licensing — including the claim that customers faced up to a 400% surcharge for running Windows Server on competitors’ clouds. Google Cloud’s senior policy voices have continued to publish commentary arguing the problem is escalating. That corporate complaint and the CMA’s subsequent findings create a parallel enforcement environment and lobby pressure that can influence litigation strategy and settlement dynamics.
The public interest argument goes beyond price: some trade commentators and cloud rivals warn that concentration of workloads on a single vendor increases systemic risk and reduces innovation. Opponents of heavy‑handed intervention worry that over‑regulation could chill investments in cloud platforms and AI capabilities. Courts and regulators will need to balance these competing policy objectives when shaping remedies.
Source: theregister.com £2B UK cloud licensing claim against Microsoft seeks backers
Background / Overview
The dispute sits at the intersection of software licensing, cloud economics and competition law. At issue is the price and availability of Microsoft server software — most notably Windows Server — when run on third‑party infrastructure such as Amazon Web Services (AWS), Google Cloud Platform (GCP) and Alibaba Cloud, compared with running the identical workloads on Microsoft’s own Azure cloud. Dr Stasi’s claim, filed in the Competition Appeal Tribunal (CAT), argues that Microsoft’s contractual and commercial licensing practices have made it materially more expensive for businesses to use those rival clouds, effectively penalising choice and favouring Azure. Those allegations did not arise in a vacuum. The UK’s Competition and Markets Authority (CMA) concluded a lengthy market review in mid‑2025 that found Microsoft’s licensing and related practices have harmed the competitiveness of rival cloud providers in the UK and produced significant price and quality differences for customers. The CMA’s findings have been widely reported and have intensified regulatory and commercial scrutiny of cloud licensing across Europe.
The proposed class representative estimates the group of affected UK organisations could be collectively owed about £2 billion — a figure that underpins the urgency in recruiting further claimants and in preparing for the CAT’s December procedural hearing to decide whether a Collective Proceedings Order (CPO) should be granted. If certified, the action would consolidate multiple UK claimants into a single collective enforcement vehicle under competition law.
What the claim says — the core allegations
- The claim alleges pricing differentials that make it substantially more expensive to run Microsoft software on non‑Azure clouds, in some reported cases many times costlier than the Azure alternative. Independent complaints and industry statements have specifically flagged markups as high as 400% in certain scenarios.
- It further alleges product availability constraints: that Microsoft has not made certain products available to rival cloud platforms through licensing agreements, and that customers with existing licences face restrictions when trying to move those licences to non‑Azure providers. The CMA found that these practices disadvantaged AWS and Google and distorted competition.
- The claim covers the period since December 2018, meaning businesses that ran Windows Server workloads on AWS, GCP or Alibaba Cloud during that timeframe may be in scope. The proposed representative’s filings and public outreach have been framed to recruit UK businesses that believe they incurred excessive licensing costs because of Microsoft’s policies.
How the legal machinery works: Collective Proceedings Orders and the CAT
What is a CPO and why it matters
A Collective Proceedings Order (CPO) is the UK mechanism that allows representative actions in competition law to proceed on a group basis. If the CAT grants a CPO, qualifying members of the class can be included in the collective action and — depending on whether it is an opt‑in or opt‑out structure — may be bound by the trial outcome unless they opt out under the tribunal’s rules.A CPO is a procedural gatekeeper: the CAT will assess whether the claim is suitable for collective proceedings, whether the proposed class representative is appropriate, and whether there is a coherent and manageable common methodology for proving liability and quantifying loss across thousands of businesses. The December hearing will focus on those certification issues, not the merits of the abuse or the calculation of damages.
The practical timetable to watch
According to tribunal orders reported in press reporting, Microsoft was given until 25 July 2025 to file its initial response to the claim, with Dr Stasi’s team allowed until 10 October 2025 to file a reply; the CAT scheduled the CPO hearing for 11 December 2025. Whether Microsoft filed substantive defences or relied on procedural challenges has been a point of public speculation; at minimum, the company had the opportunity to contest certification and to raise jurisdictional or merits‑based defences before the CAT.Regulatory backdrop: the CMA and Google’s complaint
The legal claim dovetails with expanded regulatory scrutiny. In July 2025 the CMA published the findings of its cloud market review and concluded Microsoft’s licensing practices were adversely impacting AWS and Google’s ability to compete effectively for UK customers that use Microsoft software as an input. The CMA report recommended exploring remedies and potentially using the UK’s new digital markets toolkit to address loyalty‑inducing or exclusionary conduct. That public regulatory weight strengthens the factual backdrop that the claim advances.Separately, Google formally lodged a complaint with the European Commission in 2024, documenting similar allegations about Microsoft’s licensing — including the claim that customers faced up to a 400% surcharge for running Windows Server on competitors’ clouds. Google Cloud’s senior policy voices have continued to publish commentary arguing the problem is escalating. That corporate complaint and the CMA’s subsequent findings create a parallel enforcement environment and lobby pressure that can influence litigation strategy and settlement dynamics.
What the CMA actually found (and what’s still contested)
The CMA’s work is the most important public fact set in this story because it is a hairline between regulatory findings and civil liability. Broadly, the CMA found that:- Microsoft and AWS together have a very large share of UK cloud customer spending, creating high switching costs and market power concerns.
- Microsoft’s licensing terms create material price and/or quality differences that disadvantage customers when they run specific Microsoft products on rival clouds.
- Some Microsoft products or licensing paths are not made available to AWS and Google by agreement, and many customers with existing licences cannot migrate those to AWS/Google easily — a practical and contractual headwind for rivals.
Legal strengths of the proposed claim
- Regulatory corroboration: The CMA’s public findings provide powerful, independent support for the factual premise that Microsoft’s licensing practices can and did impede competition — a major evidentiary asset for claimants.
- Industry momentum: Google’s EU complaint and public comment from other cloud providers and trade groups have generated contemporaneous documentation and policy submissions that litigators can use to show market effects and contemporaneous understanding of the issues.
- Manageable temporal scope: The claim has defined a discrete start date (December 2018) that narrows the window of alleged misconduct and the universe of transactions that must be analysed — a practical advantage in constructing loss models if the claim is certified.
- Representative leadership and counsel: The proposed class representative and counsel team include recognised competition litigator profiles and specialist firms, giving the case expert legal direction from the outset.
Legal and evidentiary challenges the claim faces
- Certification hurdles: The CAT will scrutinise whether there is a common, reliable methodology to prove both liability and damages across the proposed class. Showing that thousands of businesses suffered a uniform overcharge that can be calculated on a class basis is harder than proving the underlying anti‑competitive conduct. If damages are highly fact‑specific, the CAT may refuse a CPO.
- Causation and counterfactuals: Claimants must show not only that Microsoft’s contracts imposed higher fees, but that those fees caused businesses to pay more than they would have in a competitive counterfactual. Microsoft can argue customers accepted the economic terms voluntarily, received value, or mitigated costs through discounts, bespoke agreements, or Microsoft‑approved licensing routes. Establishing causal links at scale is technically complex.
- Quantifying damages: Calculating per‑customer overpayment requires detailed licensing records, invoices, contract terms and technical proof of the precise workloads and usage patterns during the relevant period. For many SMEs or public bodies, such granular data may be incomplete or difficult to reproduce historically. That evidentiary gap can reduce recoverable sums or complicate statistical modelling.
- Microsoft’s likely defences: Microsoft has historically argued that its licensing policies are competitive and that differences in price reflect legitimate commercial distinctions, product integration and support levels, or the costs of special licensing programs. The company can also challenge the tribunal’s jurisdictional or procedural posture, and push for narrow or de‑certified classes.
- Procedural delay and costs: Even with a CPO, complex competition litigation is resource‑intensive and multi‑year; the eventual settlement or judgment will be net of legal costs and must pass scrutiny from the court and any consumer/opt‑in procedures. The risk of attrition for small claimants is real.
Commercial and market implications if the case proceeds
- For businesses: A certified class and a successful outcome would mean not just compensation, but a powerful market signal that could force Microsoft to change its licensing terms and restore parity for third‑party clouds — reducing the effective “lock‑in tax” companies currently face.
- For cloud competition: A civil ruling, particularly backed by regulatory action, would lower switching costs and could increase commercial options for multicloud strategies, realigning total cost of ownership (TCO) calculations for IT decision‑makers.
- For Microsoft: Beyond potential damages, an adverse ruling or a regulatory remedy could constrain its commercial licensing playbook globally and affect revenue capture strategies tied to Azure adoption. It may also accelerate negotiations with cloud partners to change commercial terms proactively.
What businesses should be doing now (practical checklist)
- Audit licence records and invoices: Preserve historical licensing agreements, invoices, correspondence with Microsoft and cloud providers, and usage reports for Windows Server workloads since December 2018. These documents will be the backbone of any eventual claim or eligibility assessment.
- Map workloads and migration choices: Document when and why workloads were placed on AWS, GCP or Alibaba, including any procurement or technical reasons that explain cloud choice, and any price discussions with Microsoft or resellers.
- Seek independent advice: Talk to procurement, legal and licensing specialists to calculate potential overcharges and to advise on confidentiality, privilege and evidence preservation. Specialist competition counsel can also help evaluate whether a given organisation should opt into a collective action or pursue separate remedies.
- Monitor regulatory movement: Keep an eye on CMA and EU procedures; regulatory remedies (or commitments) may change the commercial landscape quickly and affect litigation strategy.
Wider policy and public interest angles
This case is emblematic of a broader policy question: whether dominant software suppliers can — through licensing architecture — reshape adjacent infrastructure markets and effectively steer customers to their own services. Regulators globally are increasingly alert to loyalty‑inducing pricing and contractual structures that can entrench market power. The UK CMA’s findings, Google’s EU complaint and contemporaneous interest from other authorities (including scrutiny in the United States) illustrate that cloud licensing is now a focal point of digital competition policy.The public interest argument goes beyond price: some trade commentators and cloud rivals warn that concentration of workloads on a single vendor increases systemic risk and reduces innovation. Opponents of heavy‑handed intervention worry that over‑regulation could chill investments in cloud platforms and AI capabilities. Courts and regulators will need to balance these competing policy objectives when shaping remedies.
Where the evidence is strong — and where claims remain tentative
- Strong: The CMA’s public assessment and Google’s formal complaint provide documentary and investigative weight that Microsoft’s licensing practices have at least produced materially different outcomes for customers depending on their cloud choice. That public validation significantly strengthens the factual core of a civil damages claim.
- Tentative / Unverified: One oft‑repeated detail — that the CMA’s final report runs to “637 pages” — appears in some commentary but is not consistently confirmed in mainstream reporting; readers should treat specific page‑count claims with caution until the CMA’s original report or an official count is consulted. Likewise, public reporting that Microsoft has already filed an extensive defence at the CAT is thin; the tribunal set a July deadline for Microsoft to respond, but comprehensive public summaries of Microsoft’s pleading have not been universally published. These alphanumeric particulars matter for certainty but do not alter the broader legal dynamics.
Likely next steps and timeline
- Short term (now to December 2025): The CAT will hold the CPO certification hearing on 11 December 2025 to decide whether the matter can proceed as a collective action. Procedural skirmishes over class definition, manageability, and evidence schedules are likely at that stage.
- Medium term (2026): If certified, the case will move into disclosure, expert evidence, and damage quantification phases. The CMA’s ongoing or follow‑on regulatory work (including any DMCC or SMS designations) could either help narrow factual disputes or, alternatively, complicate litigation if regulatory remedies change the commercial landscape.
- Long term: Full trial and appeals could take multiple years. Settlement remains a plausible outcome — Microsoft has previously used settlements and commercial fixes in other European contexts to resolve regulatory complaints — but any settlement will need to be examined for scope, compensation, and non‑monetary remedies.
Critical takeaways for IT leaders and procurement teams
- Licensing should be a first‑class line item in cloud TCO modelling. Differences in licence treatment across providers can swamp compute or storage differentials and change the optimal cloud choice for legacy workloads.
- Keep rigorous records. If your organisation used Windows Server on AWS, Google Cloud or Alibaba since December 2018, store the invoices, contracts, usage logs and any vendor communications securely — these are the documents that underpin damage claims and procurement audits.
- Revisit multicloud and migration plans. With regulatory attention and potential litigation outcomes in flux, organisations should quantify both the short‑term switching costs and the medium‑term benefits of vendor diversification.
- Watch regulation and litigation in tandem. Regulatory action (CMA, EU, FTC) can affect commercial remedies faster than courts, so expect a mixture of legal, commercial and policy outcomes that may interact unpredictably.
Conclusion
The proposed £2 billion class action against Microsoft — backed by regulatory findings from the CMA and reinforced by industry complaints — frames a vital test of how software licensing contracts shape the modern cloud market. The December Competition Appeal Tribunal hearing will be the immediate inflection point: if the CAT grants a Collective Proceedings Order, the litigation will move from procedural posturing to full discovery, expert modelling and an extended contest over liability, causation and damages. For UK organisations that ran Windows Server on rival clouds, the case is more than abstract competition policy: it is a possible route to recover substantial sums and to pressure for more neutral, transparent licensing that restores genuine multicloud choice.Source: theregister.com £2B UK cloud licensing claim against Microsoft seeks backers
