A £1 billion ($1.27bn) lawsuit on behalf of thousands of UK businesses claims that Microsoft has unfairly overcharged rival cloud companies’ customers.
It claims that customers using Amazon Web Services (AWS), Google Cloud, and Alibaba Cloud had to pay more to license Windows Server than if they had used Microsoft Azure.
Competition lawyer Dr. Maria Luisa Stasi, head of law and policy for digital rights advocacy group Article19, is the claimant in the case.
Microsoft did not respond to requests for comment.
“Put simply, Microsoft is punishing UK businesses and organizations for using Google, Amazon, and Alibaba for cloud computing by forcing them to pay more money for Windows Server," Dr. Stasi said.
"By doing so, Microsoft is trying to force customers into using its cloud computing service Azure and restricting competition in the sector.
"This lawsuit aims to challenge Microsoft’s anti-competitive behavior, push them to reveal exactly how much businesses in the UK have been illegally penalized, and return the money to organizations that have been unfairly overcharged."
The UK's Competition and Markets Authority (CMA) is currently investigating the cloud market, with Microsoft's licensing practices believed to be central to the investigation. First launched in October 2023, the CMA is expected to announce its findings next August.
Both AWS and Google have said that the license fees are anti-competitive and leave them at a disadvantage.
In its response to those comments this summer, Microsoft said that license fees for its software do not "materially raise costs for its competitors," adding that AWS and Google have "ample margin to compete with Azure."
“Amazon and Google are investing $50bn and $30bn in capex, which demonstrates their committed ‘money where your mouth is’ belief in a profitable and competitive future in cloud. These are not the actions of marginalized or weakened rivals struggling to compete with the burden of compensating Microsoft for making profitable use of its [intellectual property] at (hyper) scale.”
Back in 2022, industry trade body Cloud Infrastructure Services Providers in Europe (CISPE) filed a complaint with the EU over Microsoft's licensing practices.
This July, Microsoft paid €20 million ($21.7m) to settle the complaint, along with a promise to develop a product - Azure Stack HCI for European cloud providers (Hosters) - that enables CISPE's members to run Microsoft software on their platforms at equivalent prices to Microsoft's.
CISPE will establish an independent European Cloud Observatory to monitor the development of this product.
The company will also compensate CISPE members for lost revenues related to their licensing costs for the last two years.
The settlement, however, does not include AWS, Google Cloud, or Alibaba's cloud. Last month, it was revealed that Google offered CISPE millions in financial incentives to continue its complaint against Microsoft.
