Microsoft is facing legal action in the UK over allegations that it is overcharging thousands of businesses for Windows Server software licenses. The issue arises from Microsoft’s licensing policies for its cloud computing services, which are used by companies that also utilize cloud services from Amazon, Google, and Alibaba.
A case has been filed at the Competition Appeal Tribunal of the United Kingdom by competition lawyer Maria Luisa Stasi, alleging that Microsoft’s practices have resulted in British businesses and organizations being overcharged. The claim estimates that these entities may be collectively owed over £1 billion ($1.27 billion) in compensation.
“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,” said Stasi “By doing so, Microsoft is trying to force customers into using its cloud computing service Azure and restricting competition in the sector.”
The investigation is scrutinizing Microsoft’s licensing practices, specifically those related to its Windows Server and Microsoft 365 products. An update on the investigation is expected soon.
An update on the investigation is expected soon. The controversy surrounds Microsoft’s decision in 2020 to introduce new license fees for customers using its software on major cloud providers, such as Amazon and Google. According to the claim, Microsoft then allegedly used these fees to encourage customers to switch to its own Azure platform.
According to data released by the Competition and Markets Authority in May, Microsoft has been gaining customers at a notably faster rate than other cloud providers since implementing the licensing changes.
The US Federal Trade Commission has launched a comprehensive antitrust investigation into Microsoft, with a focus that includes its cloud computing operations, a source with knowledge of the situation has revealed.
According to sources, the FTC is probing allegations that Microsoft may be misusing its dominant position in productivity software. Specifically, the investigation is looking into whether the company is imposing restrictive licensing terms that effectively punish customers for switching from Azure to rival platforms.
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