The UK’s Competition Appeal Tribunal has ruled that Microsoft must face a mass lawsuit alleging it overcharged businesses to use Windows Server on third-party cloud platforms, an action the plaintiff claims could be worth billions of pounds.
Digital markets regulation expert Dr Maria Luisa Stasi filed the complaint with her lawyers at law firm Scott+Scott in December 2024, alleging that British businesses and organisations could collectively be owed up to £2.1 billion in compensation from the tech giant.
The lawsuit represents nearly 60,000 British businesses that run Windows Server on non-Microsoft cloud platforms such as Amazon Web Services, Google Cloud or Alibaba Cloud.
Cloud licensing
Microsoft had argued that Stasi’s case should be thrown out as it fails to provide a workable method for calculating alleged losses.
The CAT disagreed, saying the case could proceed toward trial, in a decision Microsoft said it would appeal.
Stasi said the ruling was “an important moment for the thousands of organisations impacted by Microsoft’s conduct”.
In a hearing last year, Microsoft argued its business model with Azure and Windows Server benefited competition.
In March, the UK Competition and Markets Authority opened a probe into Microsoft’s suite of enterprise software, beginning in May, that will determine whether the company can be designated as having strategic market status (SMS) in the sector – this opening the way for targeted action under new legal powers.
Regulatory probe
The probe has specific relevance to Microsoft’s cloud licensing practices in its cloud business, which the CMA found last July to be negatively affecting competition.
The CMA said at the time took issue with Microsoft’s cloud licensing practices, including charging customers more for Windows Server and Microsoft 365 on other companies’ cloud platforms.
The cloud licensing practices of Microsoft and other firms are also being investigated in the EU and the US.
