Key insights
- Microsoft faces a UK lawsuit alleging overcharging British businesses for Windows Server licenses on rival cloud platforms like AWS and Google Cloud. The lawsuit claims Microsoft's pricing favors its Azure cloud service. While the immediate impact on US equities is limited, ongoing regulatory scrutiny of cloud computing practices in the US and Europe could create headwinds for Microsoft and other major players.
Investing.com -- Microsoft (NASDAQ:MSFT) must face a mass lawsuit alleging it overcharged thousands of British businesses for using Windows Server software on cloud computing services provided by Amazon, Google and Alibaba, a London tribunal ruled on Tuesday.
Competition lawyer Maria Luisa Stasi is bringing the case on behalf of nearly 60,000 businesses that run Windows Server on rival cloud platforms. Her lawyers have previously said the claim was worth up to £2.1 billion ($2.8 billion).
The lawsuit argues that businesses were overcharged because Microsoft charges higher wholesale prices for Windows Server than for users of Azure, costs that are passed on to customers and make Azure cheaper than Amazon’s AWS (NASDAQ:AMZN) or Google Cloud (NASDAQ:GOOGL).
Microsoft said Stasi’s case failed to set out a workable method for calculating any alleged losses and should be thrown out.
London’s Competition Appeal Tribunal certified the case to proceed towards trial, an early step in the proceedings. Microsoft did not immediately respond to a request for comment.
Stasi said in a statement that the ruling was "an important moment for the thousands of organisations impacted by Microsoft’s conduct".
Microsoft argued at last year’s hearing that its vertically integrated business model, using Windows Server as an input for Azure while also licensing it to rivals, can benefit competition.
Regulators in Britain, Europe and the U.S. are separately examining the practices of Microsoft and other firms in cloud computing.
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