The lawsuit claims that Microsoft is aware of its ‘dominant’ market position and uses it to ‘extract’ higher prices.
A lawsuit has been filed against Microsoft which alleges that the tech giant overcharges businesses in the UK for using its products.
According lawsuit filed today (3 December) by Dr Maria Luisa Stasi and the law firm Scott+Scott, Microsoft’s UK customers using its competitors’ cloud services – Amazon Web Services (AWS), Google Cloud Platform or Alibaba Cloud – may have been charged a higher licensing fee for using the its Windows Server than those use Microsoft’s cloud computing service Azure.
A 2023 report from the Competition and Markets Authority (CMA) showed that Microsoft and AWS held a combined UK market share of between 70 – 80pc in cloud infrastructure services in 2022.
Submitted to the country’s Competition Appeal Tribunal, the lawsuit claims the company is “aware” of its “dominant position” in the market and leverages it to ‘extract’ higher prices while also trying to “induce” its customers to move to Azure. As a result, it claims that businesses in the country are collectively owned more than £1bn.
Representing “many thousands” of businesses and organisations, the “lawsuit aims to challenge Microsoft’s anti-competitive behaviour, push them to reveal exactly how much businesses in the UK have been illegally penalised, and return the money to organisations that have been unfairly overcharged,” Stasi, a market regulations expert, said.
The petitioners filed the lawsuit on an “opt-out” basis, meaning, all UK businesses are represented in this case, unless they wish not to be. According to the petitioners, small businesses across the country are hit particularly hard by Microsoft’s hiked licensing fees.
Stasi said: “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.
“By doing so, Microsoft is trying to force customers into using its cloud computing service Azure and restricting competition in the sector”.
“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, a partner at Scott+Scott.
The more than $3trn company was singled out along with Amazon last year by the UK’s media and comms regulator Ofcom over their alleged anticompetitive practices which included egress fees, committed spend discounts and technical restrictions on interoperability.
Following Ofcom’s probe, the two were referred to the CMA for further investigation, which led to the two companies making anticompetitive claims against each other. The ongoing investigation is expected to conclude by August 2025.
Don’t miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic’s digest of need-to-know sci-tech news.
