Microsoft sued for £1B in UK for 'punishing' cloud practices
What's the story
Microsoft is being sued in the UK for more than £1 billion ($1.27 billion) in damages. The tech giant has been accused of unfairly inflating prices for customers using rival cloud services like Amazon Web Services (AWS), Google Cloud Platform, and Alibaba Cloud. The suit claims these customers pay more to license Microsoft's cloud-based Windows Server software on their infrastructure, than those using Microsoft's own Azure cloud service.
Market dominance
Allegations of anti-competitive behavior
The lawsuit contends that companies using the popular server software are effectively being overcharged when they choose other cloud computing options. It also alleges that Microsoft is using its dominant market position in cloud-based server operating systems, to charge higher prices and entice customers into switching to Azure. Maria Luisa Stasi, a competition lawyer spearheading this legal battle, seeks over £1 billion in compensation for affected firms.
Legal stance
Stasi's statement on Microsoft's alleged anti-competitive practices
Stasi, who also heads law and policy for digital rights advocacy group Article19, said, "Microsoft is punishing UK businesses and organizations for using Google, Amazon and Alibaba for cloud computing by forcing them to pay more money for Windows Server." She accused Microsoft of trying to coerce customers into using its cloud computing service Azure, thereby limiting competition in the sector.
Legal objectives
Lawsuit aims to challenge Microsoft's behavior
The main goal of the lawsuit is to take Microsoft to task for its alleged anti-competitive behavior, and force it to reveal the precise amount UK businesses have been unlawfully penalized. It also aims to pay back companies that have been unfairly overcharged. The legal action represents thousands of British businesses and organizations, working on an "opt-out" collective basis, meaning any potentially affected company is automatically included and can get a payout if Microsoft loses.
Regulatory action
UK's CMA to address anti-competitive practices
The UK's Competition and Markets Authority (CMA) is also working on "behavioral" remedies to curb anti-competitive practices in the cloud industry after a long investigation. This comes just as the lawsuit against Microsoft takes shape. Earlier this year, Microsoft settled a €20 million ($21 million) dispute with cloud trade body CISPE and its members, over an EU antitrust complaint accusing it of unfair software licensing practices at its cloud division.