A UK law firm has initiated a class-action lawsuit against Microsoft, alleging that the tech giant is exploiting its significant market presence to inflate charges for clients using Windows Server on competitive cloud services like AWS, Google Cloud, and Alibaba Cloud, instead of its own Azure platform. This legal action estimates damages exceeding £1 billion (about $1.3 billion).

The lawsuit represents all UK businesses and organizations that purchased Windows Server licenses through these competing platforms, claiming they were overcharged. The firm underscores the importance of Microsoft’s market share, as excessive control can lead to compliance issues concerning pricing practices.

Specific mention is made of the UK’s Competition and Markets Authority (CMA) in the lawsuit’s announcement, which was filed with the Competition Appeal Tribunal. The statement cites Microsoft’s current record revenue of nearly £185 billion and its dominant position in desktop operating systems, holding a market share of 70% to 80%.

Named plaintiff Maria Luisa Stasi asserts that Microsoft penalizes UK organizations for opting for competitors’ cloud services, effectively pushing these clients towards Azure while stifling competition. She argues that the legal action is intended to compel Microsoft to disclose the overcharging amounts and return funds to affected organizations.

While the lawsuit was filed with the Competition Appeal Tribunal, details were not immediately available as documents typically take time to become public. Microsoft has refrained from commenting on the lawsuit.

This is not the first time Microsoft has faced such allegations. The company has dealt with similar accusations over the years, and the US Federal Trade Commission is currently investigating related issues regarding Microsoft’s cloud and AI practices.

Experts in the field, including Moor Insights & Strategy analyst Matt Kimball, expressed confusion regarding the rationale for different licensing fees when using Azure compared to other cloud providers, questioning whether it’s justified by increased support and maintenance costs. He pointed out that all major cloud providers have similar pricing strategies to encourage customer loyalty.

IDC’s Jim Mercer highlighted the intense competition among major cloud service providers, noting that pricing, innovation, scalability, and additional service offerings are areas where these companies vie for market dominance. This competitive landscape underpins the grievances voiced in the recent lawsuit against Microsoft.

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