Microsoft Sued by UK Authorities Over Cloud Computing License Issues

LONDON: Microsoft is being sued in Britain for allegedly charging thousands of companies higher fees to use Windows Server software, even when those companies use cloud computing services from Amazon, Google, and Alibaba.

British companies and organisations may be entitled to around $1.27 billion (or over 1 billion pounds) in compensation, according to competition lawyer Maria Luisa Stasi, who filed a complaint at the Competition Appeal Tribunal on Tuesday.

“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,”  she stated.

“By doing so, Microsoft is trying to force customers into using its cloud computing service Azure and restricting competition in the sector.”

Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform are the three main players in the cloud computing industry, and the UK’s competition regulator is looking into this sector independently.

Its investigation includes Microsoft’s licensing policies and procedures, including those pertaining to Windows Server and Microsoft 365. Its study is about to yield an update very soon.

Microsoft Faces Legal Challenges Over Cloud Licensing Fees

In 2020, Microsoft implemented new licensing fees for using its software on some of the most prominent cloud providers. After charging users, the claim says it used the money to get them to use its Azure platform.

In May, the Competition and Markets Authority released data showing that since making the licensing adjustment, Microsoft has been acquiring customers at a far greater rate than rival cloud providers.

A person familiar with the situation said that last week the US Federal Trade Commission initiated a comprehensive antitrust probe into Microsoft, which includes its cloud computing division.

Allegations surfaced last month that the software giant may have abused its market dominance in productivity software by forcing customers to stay on Azure and not switch to other platforms through the imposition of heavy licensing terms. The FTC is reportedly looking into these claims.