Microsoft is within the crosshairs of a U.Okay. competitors class-action type lawsuit that’s searching for £1 billion (round $1.25 billion at present trade charges) in damages. It revolves round accusations associated to charges the software program large charged companies and different organizations for licensing Home windows Server once they had been clients of rival cloud computing platforms.
The swimsuit, which was filed Tuesday within the U.Okay.’s Competitors Attraction Tribunal, alleges that clients of Amazon’s AWS, Google Cloud Platform (GCP), and Alibaba Cloud needed to pay increased charges to make use of Microsoft’s software program in comparison with clients of its personal Azure cloud computing service.
The litigation comes towards a background of rising competitors complaints and scrutiny on cloud computing lately.
Simply final week, Reuters reported that the U.S. Federal Commerce Fee had opened a broad antitrust probe of Microsoft, together with its software program licensing and cloud computing enterprise.
Europe has additionally been dialling up consideration on practices by cloud computing giants. Again in October 2023, the U.Okay.’s Competitors and Markets Authority (CMA) launched a market investigation into cloud computing after a referral by the communications regulator Ofcom, following its personal April 2023 examine which had flagged issues with the market — expressing specific concern over Amazon and Microsoft’s practices.
The CMA’s investigation stays ongoing, after the watchdog prolonged the statutory deadline this September, so it’s not anticipated to report again till subsequent yr. However the litigants evidently aren’t ready to listen to its verdict on Microsoft’s reductions earlier than submitting swimsuit.
EU grievance
The tech large has already paid “tens of tens of millions in settlements” over the identical practices in Europe, they recommend — pointing to a settlement Microsoft made with cloud providers commerce affiliation CISPE, again in July (reportedly price €20 million), which closed an EU antitrust grievance filed again in November 2022.
The whiff of a monetary settlement can shortly flip greenback indicators into the eyes of litigation funders, so the CISPE settlement is more likely to have contributed to driving ahead the U.Okay. declare. Although it’s additionally notable how a lot increased the headline damages determine is in comparison with how a lot Microsoft reportedly paid to settle the EU grievance.
The U.Okay. swimsuit is being funded by LCM Funding UK Restricted, the U.Okay. workplace of the worldwide dispute finance supplier, Litigation Capital Administration (aka LCM).
The billion-pound UK swimsuit has been filed by competitors legislation and digital markets regulation skilled, Dr. Maria Luisa Stasi, on behalf of “hundreds” of native companies and organizations that the collective motion alleges had been overcharged for utilizing Home windows Server. She takes on all the prices (and due to this fact threat) of the swimsuit, because of the financing association with LCM.
Commenting in a press release, Luisa Stasi stated: “Put merely, Microsoft is punishing U.Okay. companies and organisations for utilizing Google, Amazon and Alibaba for cloud computing by forcing them to pay more cash for Home windows Server. By doing so, Microsoft is making an attempt to pressure clients into utilizing its cloud computing service Azure and proscribing competitors within the sector.”
“This lawsuit goals to problem Microsoft’s anti-competitive behaviour, push them to disclose precisely how a lot companies within the UK have been illegally penalised, and return the cash to organisations which were unfairly overcharged,” she added.
U.Okay. clients of Microsoft are being included on an opt-out foundation (which means they’re mechanically a part of the motion until they actively select to exclude themselves). As famous above, there are not any prices for being included within the litigation — with solely the potential upside of successful damages if the swimsuit prevails (or Microsoft settles). Entities wanting to search out out extra details about the swimsuit can discuss with the declare web site.
Microsoft has been contacted for a response to the lawsuit.
