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Microsoft has been sued in the United Kingdom on charges of anti-competitive practices in the cloud market, with claimed damages exceeding £1 billion ($1.27 billion). The lawsuit claims that Microsoft is penalizing companies that use cloud services from competitors such as Amazon Web Services (AWS), Google Cloud Platform and Alibaba Cloud, by imposing higher fees to license its Windows Server software on their infrastructures.
The accusations against Microsoft
According to the lawsuit, filed by competition attorney Maria Luisa Stasi, Microsoft offers lower prices to companies that run Windows Server on its own platform, Azure, while charging more to those who opt for alternatives. This approach would have created an environment that induces customers to migrate to Azure, restricting competition in the sector.
Stasi, who also leads legal policy at digital rights organization Article19, said:
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«Microsoft is punishing UK companies for using alternatives such as Google, Amazon and Alibaba, forcing them to pay more to use Windows Server. This seeks to limit competition and strengthen Azure’s position in the market.
The lawsuit, which represents thousands of British companies and organizations in a class action, seeks to recover amounts that these entities would have overpaid due to Microsoft’s practices. It should be noted that it is a case of «opt-out», which means that all affected companies are automatically included and may receive compensation if the lawsuit is successful.
Regulatory context in the cloud
The case comes as the UK’s Competition and Markets Authority (CMA) prepares to issue interim decisions on anti-competitive practices in the cloud industry. This body has been investigating the sector for months and an announcement is expected before the end of the year.
Additionally, Microsoft has faced previous criticism and legal action in Europe over its cloud licensing structure. In July, it reached a 20 million euro ($21 million) deal with CISPE, a cloud trade body, pledging to offer uniform pricing for running its software on smaller enterprise platforms.
Implications for the cloud market
The complaints are not limited to the United Kingdom. In September, Google filed new antitrust complaint against Microsoft before the European Commission, arguing that Microsoft’s licensing terms limit companies’ ability to switch providers, consolidating their dominance in the cloud market.
Solange Viegas Dos Reis, legal director at French firm OVHCloud, highlighted that certain hyperscalar providers (such as Microsoft) combine software and cloud infrastructure services in ways that make fair competition difficult.
According to data from Synergy Research Group, the market share of European cloud companies fell from 27% to 13% between 2017 and 2022, while the market grew fivefold to €10.4 billion.
Implications for Microsoft
Although Microsoft has reached agreements to resolve previous complaints, such as the one signed with OVHCloud in July, the case in the United Kingdom could open a new battle front for the technology giant. The resolution of this lawsuit, as well as the CMA’s decision, could set significant precedents for how the cloud market and software licensing practices are regulated in Europe.
The dispute between Microsoft and cloud market players underlines the growing importance of ensuring fair competition in a sector that plays a key role in the global digital economy.
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