Microsoft faces 25th July deadline in £2 billion UK cloud licensing lawsuit

If you run Windows Server in AWS or GCP you may have been overcharged, argues competition lawyer

Microsoft is accused of anti-competitive practices by charging UK firms significantly more to run its Windows Server software in rival cloud environments

The UK Competition Appeal Tribunal (CAT) has issued a formal order giving Microsoft until 25 July 2025 to respond to a major collective legal claim accusing the tech giant of anti-competitive cloud licensing practices that allegedly overcharged thousands of UK businesses.

The legal action, brought forward by competition lawyer Maria Luisa Stasi and her legal team at complex disputes resolution firm Scott+Scott, could see Microsoft facing damages of up to £2 billion.

The legal claim centres on Microsoft's alleged practice of charging UK firms significantly more to run its Windows Server software in rival cloud environments, such as those offered by Amazon Web Services (AWS), Google Cloud, and Alibaba, compared to its own Azure platform.

According to Stasi, this pricing strategy amounts to a "punishment" for UK businesses that choose to use alternative cloud providers, effectively forcing customers into Microsoft's ecosystem and distorting competition in the cloud computing sector.

"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," Stasi told Computer Weekly.

"By doing so, Microsoft is trying to force customers into using its cloud computing service, Azure, and restricting competition in the sector."

The Competition Appeal Tribunal has scheduled a hearing for 11 December 2025 to decide whether to grant a Collective Proceedings Order (CPO) for the case.

A CPO allows multiple claimants with similar grievances to collectively pursue legal action under UK competition law.

"The hearing in December 2025 will determine whether the tribunal grants a collective proceedings order, certifying the claim and paving the way for it to proceed to full trial," said Stasi's legal team.

The tribunal also ordered that Microsoft's response must be filed by 25 July 2025, while Stasi's reply is due by 10 October 2025.

The claim estimates that UK firms could be entitled to as much as £2 billion in compensation due to Microsoft's licensing tactics, which have drawn growing regulatory scrutiny.

Microsoft has not publicly commented on the CAT's latest order or the £2 billion claim.

Microsoft's practices have been under investigation by competition regulators and trade groups across both the UK and the EU.

In the UK, the Competition and Markets Authority (CMA) previously highlighted Microsoft's pricing strategy as a significant concern in its broader investigation into anti-competitive conduct within the UK cloud services market.

In September 2024, Google filed a formal complaint with the European Commission over Microsoft's cloud software licensing behaviour.

The complaint alleged that Microsoft's licensing terms for Windows Server operating system are designed to lock customers into its Azure cloud platform.

It further argued that customers are being charged significantly higher fees to run Windows Server on competing cloud platforms like Google Cloud Platform (GCP), creating an unfair advantage for Microsoft's Azure cloud infrastructure offering.

The complaint also highlighted the potential security risks associated with Microsoft's practices, suggesting that businesses may be more vulnerable to cyberattacks if they are locked into Microsoft's ecosystem.