Microsoft faces $1.27 billion antitrust lawsuit over cloud services in UK
Summary
Microsoft faces a dispute in the U.K. over how it charges customers who buy cloud software services that rival its own Azure, the latest antitrust challenge to the U.S. tech giant’s approach to licensing.
Microsoft faces a 1 billion pound ($1.27 billion) dispute in the U.K. over how it charges customers who buy cloud software services that rival its own Azure, the latest antitrust challenge to the U.S. tech giant’s approach to licensing.
The lawsuit brought on behalf of multiple parties by litigation specialist firm Scott+Scott alleges that Microsoft is leveraging its dominance in must-have computer operating systems and unfairly charging business customers more if they purchase its Windows Server and use it with the tech giants’ main rivals’ cloud platforms.
The suit was filed on Tuesday with the U.K.’s Competition Appeal Tribunal by Scott+Scott, headquartered in New York. According to the firm, Microsoft is “punishing U.K. businesses and organizations for using Google, Amazon and Alibaba for cloud computing by forcing them to pay more money for Windows Server."
Maria Luisa Stasi, the lead claimant representing U.K. businesses and organizations that have allegedly been overcharged, said Microsoft’s approach restricts competition in the sector by steering customers towards Azure, the company’s own cloud computing service.
The claim is backed by alternative asset manager and third-party litigation funder LCM Funding UK.
Microsoft declined to comment.
Microsoft has come under pressure from competing cloud companies in recent years over how it offers its own software to business users. The U.K.’s Competition and Markets Authority is currently investigating public cloud infrastructure services to check for issues in the sector. Both Google and Amazon’s AWS have submitted comments to the regulator that take aim at Microsoft’s licensing practices.
The CMA found in its research that AWS is the market leader in U.K. cloud and that both it and Microsoft account for the vast majority of cloud software revenues. Microsoft told the CMA in a hearing last July that although Google’s Cloud Platform hasn’t had the same success as AWS and Azure to-date, it has important advantages and that the CMA’s competition concerns ignore fierce competition between cloud service providers that drives down prices.
Write to Edith Hancock at edith.hancock@wsj.com
