Here we go again: Microsoft in UK court over cloud licensing

Stop us if you've heard this one before. Microsoft is in court regarding allegedly sharp software licensing practices.

The hearing before the UK's Competition Appeal Tribunal (CAT) concerns a case brought by Dr Maria Luisa Stasi, which accuses Microsoft of overcharging UK businesses and organizations that use Windows Server on rival platforms, such as Google or AWS. At its core, the case is simple - Microsoft is alleged to have used its market power to steer customers toward Azure.

The Proposed Class has approximately 59,000 members across a broad range of industries and sectors. According to Stasi's team, the average member has suffered a loss of in the tens of thousands of pounds.

The case was filed in December 2024. In October, a Microsoft spokesperson told The Register: "This is an opportunistic attempt by a law firm and its private funders to piggy-back on baseless complaints Google has made and which we've all addressed or rebutted." Google has long complained about Microsoft's licensing practices.

The hearing this week is a significant milestone. The CAT must grant a Collective Proceedings Order to allow the case to move to a full trial next year. Microsoft could be on the hook for compensation of more than £2 billion if it is found to have abused its market power and overcharged customers.

The Proposed Class Representative (PCR) - Stasi - says that the costs to take the case to trial are estimated at £18.4 million and "the benefits of continuing the collective proceedings strongly outweigh the costs."

There is also a Litigation Funding Agreement with Litigation Capital Management (LCM) to indemnify the PCR against any adverse costs payable to Microsoft.

Mark Boost, CEO of UK-based cloud vendor Civo, told The Register: "Microsoft's charging practices have long distorted competition in the cloud. By making it more expensive and technically difficult to run its software on rival clouds, they effectively lock customers into Azure and force challengers like us to compete at a disadvantage.

"If the case proceeds and succeeds, it could set a vital precedent that fair access and interoperability are required, not just for compensation but for the future health of the cloud market. The current situation stifles innovation and limits genuine choice for customers. Regulators need to step in to ensure the cloud isn't just a replay of the old desktop monopoly, but an open and competitive market."

In July 2025, the UK's Competition and Markets Authority (CMA) found that Microsoft charged higher prices for software products used on rival cloud computing services. The company has also been subject to European scrutiny over its practices, although a complaint was headed off by a number of concessions, including updated licensing terms. ®