A London Competition Appeal Tribunal has certified a mass claim against Microsoft alleging the company overcharged thousands of British businesses for Windows Server licences when those licences were used on rival cloud platforms. The decision, announced on April 21, allows the case to progress towards trial.
The litigation was brought by competition lawyer Maria Luisa Stasi on behalf of nearly 60,000 organisations that operate Windows Server on third-party cloud services, including platforms provided by Amazon, Google and Alibaba. Stasi's legal team has previously put a value on the claim of up to 2.1 billion pounds - equivalent to roughly $2.8 billion at the exchange rate cited in the case.
At the core of the claim is an allegation about Microsoft’s wholesale licensing approach. Stasi’s lawyers contend Microsoft sets higher wholesale prices for Windows Server licences sold to competing cloud providers than it does for users of its own Azure cloud, and that those higher wholesale costs are passed through to end customers - effectively making Azure cheaper than rival clouds such as Amazon's AWS and Google Cloud.
Microsoft sought to block the case on procedural grounds, arguing that Stasi had not proposed a workable method for calculating any alleged losses and that the claim should therefore be struck out. The company also defended its business model in earlier hearings, saying the use of Windows Server as both an input to Azure and a licensed product to other cloud operators forms part of a vertically integrated approach that can produce procompetitive outcomes.
The tribunal did not accept Microsoft’s arguments at this stage, instead certifying the collective action to proceed toward trial. The certification is an early procedural milestone that permits coordinated litigation on behalf of the group of affected businesses, rather than resolving individual claims separately.
Stasi described the tribunal’s ruling as "an important moment for the thousands of organisations impacted by Microsoft’s conduct," underlining the scale of the group she represents.
The case is unfolding against broader scrutiny of cloud software licensing by competition authorities. British, European and U.S. regulators have been examining the conduct of Microsoft and other cloud market participants. In July of the previous year, an inquiry group from Britain’s Competition and Markets Authority (CMA) concluded that Microsoft’s licensing practices had reduced competition for cloud services by materially disadvantaging AWS and Google. Microsoft responded at the time by saying the inquiry had overlooked the dynamism and competitiveness of the cloud market.
Last month, the CMA said it would reopen an investigation into Microsoft’s software licensing practices in the cloud market. Microsoft did not immediately respond to a request for comment on the tribunal's certification decision.
Financial figures included in earlier filings put the potential damages at up to 2.1 billion pounds, which is approximately $2.8 billion using the exchange rate of $1 = 0.7402 pounds cited in the proceedings.