A London-based tribunal recently ruled that Microsoft must face a class-action lawsuit alleging the tech giant has set the wholesale pricing for its Windows Server software on competing cloud platforms at higher rates than on its own Azure service.
Competition lawyer Maria Luisa Stasi initiated the lawsuit on behalf of approximately 60,000 UK businesses, seeking damages of roughly $2.8 billion. Microsoft's apparent setting of higher wholesale prices for Windows Server is an anti-competitive business practice. What's more, the extra cost is passed on to the customers who choose to access the product from rival cloud platforms.
Ultimately, this decidedly makes Azure more appealing to customers. The software giant indicated that the lawsuit doesn't provide a workable method for calculating the indicated damages, prompting it to ask the court to have the case thrown out. However, London's Competition Appeal Tribunal dismissed Microsoft's plea and indicated that the case is proceeding to trial (via Reuters).
Speaking to Reuters, a Microsoft spokesperson indicated that: "We also dispute the underlying allegations by the class representative (Stasi), and today's decision makes no final determination on those claims."
They continued, "The cloud market has never been so dynamic and competitive".
That said, Stasi argues that the tribunal's ruling to allow the lawsuit to proceed to trial was "an important moment for the thousands of organisations impacted by Microsoft's conduct".
Interestingly, Microsoft has previously argued that using Windows Server as an input for Azure while simultaneously licensing it to rivals could be beneficial for competition in the grand scheme of things. Last month, the United Kingdom's Competition and Markets Authority (CMA) indicated that it was relaunching its investigation into Microsoft's corporate software services, including Windows, Word, Excel, Teams, and Copilot.
The CMA hopes to address any concerns around Microsoft’s licensing practices in cloud and facilitate a level playing field for AI, as the technology gains broad adoption across organizations.
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