Microsoft
Microsoft is facing legal action in the UK over claims that its licensing practices for Windows Server software are forcing thousands of businesses to pay higher fees when using cloud computing services provided by Amazon, Google, and Alibaba. The case, filed by competition lawyer Maria Luisa Stasi at the Competition Appeal Tribunal, alleges that UK businesses could be owed more than 1 billion pounds ($1.27 billion) in compensation due to these practices.
According to Stasi, Microsoft is penalising UK businesses for choosing cloud services from competitors like Amazon, Google, and Alibaba, reports Reuters. She argues that the company is using higher licensing fees for Windows Server to push customers toward its own cloud platform, Azure, while limiting competition in the process.
Stasi said, “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.” “By doing so, Microsoft is trying to force customers into using its cloud computing service Azure and restricting competition in the sector.”
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This lawsuit comes as Britain’s competition regulator is already looking into the cloud computing market, which is dominated by Amazon’s AWS, Microsoft’s Azure, and, to a lesser extent, Google Cloud Platform. The investigation focuses on Microsoft’s licensing practices, including those for Windows Server and Microsoft 365 products, which are part of the inquiry.
The dispute traces back to 2020 when Microsoft introduced new licensing fees for running its software on major cloud providers. The lawsuit claims that these changes were aimed at encouraging businesses to switch to Microsoft’s Azure platform by making it more expensive for them to use other cloud services.
Data from the UK’s Competition and Markets Authority released in May showed that since Microsoft made these licensing changes, it has been winning customers at a much higher rate than its competitors.
In related news, the US Federal Trade Commission (FTC) opened a broad investigation into Microsoft last week, focusing on possible antitrust violations related to the company’s cloud business. The FTC is examining whether Microsoft has been using its market power in productivity software to impose unfair licensing terms and prevent customers from switching to competing platforms like Amazon and Google Cloud.