Microsoft Faces £1 Billion Lawsuit Over Alleged Anti-Competitive Windows Server Fees

Microsoft, which has not faced antitrust investigations in the 21st century, is now under scrutiny for its cloud product practices by competition authorities and affected users.

US Investigation and European Scrutiny

Recently, it was reported that the US Federal Trade Commission has initiated an investigation into Microsoft for anti-competitive behavior related to its software licensing and cloud computing business. Now, a class action lawsuit has been filed in UK courts for similar reasons. The suit is seeking £1 billion, approximately $1.2 billion, in damages, alleging that Microsoft’s practices have been anti-competitive.

Details of the Class-Action Lawsuit

The lawsuit claims that Microsoft offers discounts on software like Windows Server when customers use its Azure cloud platform. This strategy allegedly forces users of competing platforms such as Amazon’s AWS or Google’s Cloud Platform to incur higher costs.

While it is common for companies to provide discounts for using their products, this case may violate competition laws if Microsoft is deemed to hold a dominant position in the Windows Server segment, regardless of its position in Azure.

Due to the UK’s legal system, the lawsuit automatically includes all Microsoft customers unless they choose to opt out, and it is funded by Litigation Capital Management (LCM) Funding UK Limited, a firm specializing in such litigation. Previously, Microsoft reached an agreement with the European Cloud Services Association (CISPE) over similar issues, reportedly worth €20 million, which may have prompted the lawsuit. Additionally, Microsoft has launched a website to provide information about the case.