A major legal case has been launched against Microsoft in the UK, with claims that the technology giant overcharged thousands of businesses and organisations using rival cloud computing platforms. The lawsuit, filed with the UK’s Competition Appeal Tribunal (CAT), seeks over £1bn in compensation. It alleges that Microsoft exploited its market dominance to impose higher licensing fees for Windows Server software on users of Amazon Web Services (AWS), Google Cloud Platform (GCP), and Alibaba Cloud.
The claim, led by competition lawyer Maria Luisa Stasi, accuses Microsoft of penalising businesses that opted for its competitors’ cloud services by inflating licensing costs. The case represents all affected UK organisations on an “opt-out” basis, meaning that all potentially overcharged businesses will automatically be included unless they choose to opt out. “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, said Stasi. “By doing so, Microsoft is trying to force customers into using its cloud computing service Azure and restricting competition in the sector.
Microsoft allegedly introduced changes to its licensing policies in 2020, making it more expensive to use Windows Server on rival cloud platforms. The claim contends that this strategy was designed to push customers towards Microsoft’s own cloud service, Azure, by creating a pricing disadvantage for its competitors. The lawsuit argues this behaviour not only stifles competition but also places undue financial strain on UK businesses.
“Collective actions level the playing field and allow organisations to fight back against anti-competitive behaviour from some of the biggest companies in the world,” said James Hain-Cole, a partner at Scott+Scott, the legal firm representing the claimants. He also stated: “Dr Stasi’s case against Microsoft aims to do exactly that.”
The alleged overcharges have reportedly hit small businesses particularly hard. Many UK companies, already grappling with rising costs, face additional financial pressure due to higher cloud computing fees. Industry surveys suggest cloud computing costs for small businesses have risen sharply, with IT leaders reporting a 14% increase over the past year. The legal firm highlighted a hypothetical example, stating that, a small UK business with 10 employees using AWS for cloud services would face considerably higher costs to license Windows Server compared to using Microsoft Azure.
Regulatory investigations and settlements
The case follows increased scrutiny of Microsoft’s cloud licensing practices. Ofcom, the UK communications regulator, recently raised concerns that Microsoft and other major cloud providers may be distorting competition in the cloud market. The Competition and Markets Authority (CMA) is expected to deliver its findings from an ongoing investigation into these practices by July 2025.
Redmond’s dominance in the operating systems market has been highlighted in the investigations. In 2024, the company reported record revenues of nearly £185bn, with a market share of 70-80% in desktop operating systems, according to the CMA. This dominance is alleged to have been leveraged to gain an unfair advantage in the cloud computing sector.
Microsoft has faced similar challenges in Europe, where it paid €20m to settle allegations of anti-competitive behaviour from a group of cloud computing competitors. Meanwhile, in the US, the Federal Trade Commission (FTC) launched an expansive antitrust investigation last week into Microsoft, including its loud computing, software licensing, cybersecurity, and artificial intelligence (AI) businesses.
Read more: US FTC launches antitrust probe into Microsoft’s cloud, AI, and licensing practices
