Microsoft faces legal fight in UK over cloud computing licences

London — Microsoft faces legal action in the UK regarding a claim that thousands of businesses using cloud computing services provided by Amazon, Google and Alibaba could be paying higher licence fees to use Windows Server software.

Competition lawyer Maria Luisa Stasi filed a case at the Competition Appeal Tribunal on Tuesday, claiming UK businesses and organisations could collectively be owed more than £1bn in compensation.

“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 said.

“By doing so, Microsoft is trying to force customers into using its cloud computing service Azure and restricting competition in the sector.”

Separately, Britain’s competition regulator, the Competition and Markets Authority (CMA), is investigating cloud computing, a market dominated by Amazon’s AWS, Microsoft’s Azure and, to a lesser extent, Google Cloud Platform.

Microsoft’s licensing practices, for example for its Windows Server and Microsoft 365 products, are part of that inquiry.

The CMA is due to update on its investigation imminently.

Microsoft in 2020 introduced new licence fees for running its software on major cloud providers. The claim alleges it then used the fees to induce customers to use its Azure platform.

Data from the CMA published in May show Microsoft was winning customers at a much higher rate than other cloud providers since it made the licensing change.

The US Federal Trade Commission last week opened a broad antitrust investigation into Microsoft, including its cloud computing business, according to a source familiar with the matter.

The commission is examining allegations the software giant was potentially abusing its market power in productivity software by imposing punitive licencing terms to prevent customers from moving from Azure to competitive platforms, sources said last month.

Reuters