Microsoft Faces £1 Billion UK Lawsuit Over Alleged Anti-Competitive Cloud Pricing
Microsoft is facing a £1 billion lawsuit in the United Kingdom over claims of anti-competitive pricing practices in its cloud computing services. The lawsuit, spearheaded by competition lawyer Maria Luisa Stasi, accuses the tech giant of unfairly overcharging businesses that use rival cloud platforms like Amazon Web Services (AWS), Google Cloud, and Alibaba Cloud to host its widely used Windows Server software.
The case alleges that Microsoft offers significantly cheaper licensing fees for Windows Server software hosted on its own Azure cloud platform while charging higher fees for the same software on competitors’ platforms. This practice, according to the lawsuit, effectively penalizes businesses that opt for alternative cloud solutions and restricts competition in the industry.
“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,” Stasi stated.
“By doing so, Microsoft is trying to force customers into using its cloud computing service Azure and restricting competition in the sector.”
The legal action represents thousands of UK businesses and organizations, with Stasi emphasizing the lawsuit’s goal to expose the scale of the alleged overcharges and seek compensation for affected parties.
Regulatory Scrutiny Intensifies
The lawsuit comes as the UK’s Competition and Markets Authority (CMA) ramps up its investigation into anti-competitive practices in the cloud computing sector. The CMA is expected to issue a provisional decision on the matter by December 2024.
This is not Microsoft’s first run-in with such allegations. In March 2024, the company settled a €20 million antitrust complaint with CISPE, a European cloud trade body, by agreeing to standardize pricing across smaller cloud providers and its own Azure platform.
However, fresh challenges have emerged, with Google filing a new antitrust complaint with the European Commission in September, accusing Microsoft of restricting customers’ ability to switch platforms.
A Shifting Cloud Market
The broader cloud computing industry has witnessed remarkable growth, but European providers have struggled to compete with dominant US firms like Microsoft. According to Synergy Research Group, European cloud firms’ market share declined from 27% in 2017 to just 13% in 2022.
Solange Viegas Dos Reis, chief legal officer at French cloud provider OVHCloud, echoed concerns about the dominance of hyperscalers like Microsoft, which bundle software and infrastructure, making it difficult for third-party platforms to compete. OVHCloud itself resolved an antitrust complaint with Microsoft in July 2024.
With this lawsuit, Stasi and the affected UK businesses aim to highlight the broader implications of Microsoft’s practices, advocating for fair competition and transparency in the rapidly evolving cloud computing sector. Microsoft has yet to comment on the lawsuit.
