Microsoft is facing a £1bn class action in the UK over the prices of its Windows Server software, used in cloud computing. Dr. Maria Luisa Stasi, an expert in regulation, claims the company overcharged UK businesses. She is seeking compensation for affected companies.
The legal case is based on an “opt-out” system. This means UK organizations are automatically included unless they choose to opt out. It is the latest class action lawsuit against big tech firms, following similar cases against Facebook, Google, and mobile phone companies.
These types of lawsuits are new in the UK, having been introduced in 2015. There is little precedent, so it may take years before the outcome is known. The case coincides with an investigation by the UK’s Competition and Markets Authority into the cloud computing industry.
Cloud Computing and Microsoft’s Licensing Practices
Cloud computing involves storing data online, which can be accessed at any time. It plays a crucial role in modern business operations. Companies either use Microsoft’s Azure platform or work with providers like Amazon and Google, which may license Microsoft software.
Microsoft’s licensing practices are at the center of the controversy. Google told the CMA that Microsoft’s terms increase rivals’ costs and reduce their ability to compete. Microsoft has denied these claims, asserting that its licensing terms do not raise competitors’ costs.
The legal action argues that “many thousands” of UK businesses were affected, particularly small firms. Figures from the Office for National Statistics show more businesses closed than opened in 2022. Dr. Stasi believes that Microsoft’s actions harm UK companies by forcing them to pay more for Windows Server, pushing them toward Microsoft’s Azure service and restricting competition. The lawsuit seeks to reveal how much UK businesses have been overcharged and return the funds to affected companies.
