Microsoft Sued for £1B, UK Businesses ‘Illegally Penalized’ for Using Rival Cloud Providers

Key Takeaways

• A coalition of U.K. businesses has filed a lawsuit against Microsoft alleging unfair pricing.
• The suit accuses Microsoft of “punishing” organizations that use alternative cloud providers.
• The affected businesses are seeking over £1 billion ($1.27 billion) in damages.

Microsoft is facing a new billion-pound legal challenge brought by U.K. businesses that were allegedly overcharged for software licenses.

According to a lawsuit submitted to the Competition Appeal Tribunal, Microsoft “illegally penalized” organizations for using rival cloud computing services from Amazon, Google, and Alibaba.

Microsoft Accused of Anticompetitive Conduct

The latest dispute centers on the pricing for Windows Server, an operating system used for servers.

Court papers filed on Tuesday, Dec. 3, by the law firm Scott+Scott on behalf of affected U.K. businesses claim Microsoft customers are collectively owed more than £1 billion ($1.27 billion) in compensation after being overcharged to Windows Server on rival cloud platforms.

In an email sent to CCN, Dr. Maria Luisa Stasi, who represents the firms that Microsoft has allegedly overcharged, said the company is “punishing U.K. businesses and organizations for using Google, Amazon, and Alibaba cloud services by forcing them to pay more money for Windows Server.”

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

The latest lawsuit aims to challenge this “anti-competitive behavior” and force Microsoft to return money to organizations “that have been unfairly overcharged,” she added.

Antitrust Concerns

Even before the latest litigation, Microsoft’s cloud practices were already in the spotlight.

In the EU, the firm reached a settlement  with Cloud Infrastructure Services Providers in Europe (CISPE) that forced it to open up its software stack to other providers.

The deal enables rivals, including Amazon Web Services and Google, to offer Microsoft applications and services on their cloud infrastructures.

Meanwhile, in the U.K., the communications regulator Ofcom found  that “cloud providers are using their strong position in software products to distort competition,” highlighting Microsoft and Amazon Web Services as the two largest providers it was “particularly concerned” about.

Cloud Competition Probe

Following the Ofcom investigation, the matter was referred to the Competition and Markets Authority.

The outcome of the CMA probe is expected to be handed down in July 2025. But the regulator has already echoed  Ofcom’s concerns.

Areas the CMA is investigating include technical and financial barriers that make it harder for cloud customers to switch providers and the software licensing practices of some cloud platforms, “in particular Microsoft.”