UK Businesses Launch £1 Billion Class Action Against Microsoft Over Software Pricing

A successful legal claim against technology giant Microsoft could result in compensation for thousands of businesses across the UK. Dr. Maria Luisa Stasi, a regulation expert, has accused the tech company of excessively charging businesses for its Windows Server software, which is utilized in cloud computing. She is pursuing more than £1 billion in compensation for these UK businesses. The BBC has sought a statement from Microsoft. This particular case operates on an “opt-out” principle, which means all UK organizations are initially included in the representation unless they choose to withdraw. This action represents the most recent class action lawsuit lodged with the UK’s Competition Appeal Tribunal targeting major technology companies, with Facebook, Google, and mobile phone companies also facing similar legal challenges in separate claims. Such claims remain relatively novel, having been established in the UK in 2015, which means there is limited prior legal history to suggest the probability of success. An outcome is likely several years away. This development coincides with an ongoing investigation into the UK’s cloud computing sector by the Competition and Markets Authority (CMA). Generally, cloud computing describes data stored digitally online, accessible from any location at any time. It constitutes a fundamental component of contemporary global operations, with its applications ranging from the storage of extensive data volumes to the streaming of video and audio content. Furthermore, cloud computing has become essential to the operations of numerous businesses. This typically involves either utilizing Microsoft’s Azure platform or engaging with alternative service providers such as Amazon and Google, who might subsequently license software from Microsoft. This specific licensing aspect is the source of contention, with Google having informed the CMA in June: “We believe Microsoft’s licensing practices both raise rivals’ costs and weaken rivals’ ability to compete for a significant proportion of customer demand.” Microsoft has vehemently refuted these allegations, commencing its response to the inquiry in July by asserting that its licensing terms “do not meaningfully raise cloud rivals’ costs”. The legal proceedings initiated today contend that “many thousands” of UK businesses could have been impacted. The claim further asserts that small businesses “are hit particularly hard,” citing data from the Office for National Statistics showing that more businesses ceased operations than were established in 2022. Ms. Stasi stated, “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 added, “By doing so, Microsoft is trying to force customers into using its cloud computing service Azure and restricting competition in the sector.” She concluded, “This lawsuit aims to challenge Microsoft’s anti-competitive behaviour, push them to reveal exactly how much businesses in the UK have been illegally penalised, and return the money to organisations that have been unfairly overcharged.”