Microsoft faces $2.3bn cloud computing class action lawsuit in UK

Microsoft is facing a £1.7 billion class action lawsuit in the United Kingdom over allegations that it abused its dominant market position to overcharge businesses.

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The case has been brought by Maria Luisa Stasi on behalf of around 59,000 British businesses and organisations. It centres on claims that Microsoft imposed higher costs on customers using its Windows Server software when operating on rival cloud computing platforms.

“For years, Microsoft’s practices have had real financial impact on both public and private organisations,” Stasi said. The Competition Appeal Tribunal ruled that the case can proceed to trial, stating it has a “reasonable prospect of success.”

In their decision, judges said: “Microsoft is alleged to be abusing its dominance in the paid server OS (operating system) market to harm competition in the cloud computing services market.” If successful, the claimants estimate compensation could range between £1.7 billion and £2.1 billion.

Microsoft said it intends to appeal the ruling. A spokesperson for the company said: “We also dispute the underlying allegations by the class representative, and today’s decision makes no final determination on those claims.”

The lawsuit comes amid broader regulatory scrutiny of Microsoft’s cloud computing practices in both the UK and the European Union. British regulators are currently examining the company’s software licensing practices in the cloud market to determine whether it should be designated as having “strategic market status,” a classification that would subject it to stricter competition requirements.