Microsoft Faces a £2bn Legal Battle Over UK Cloud Licensing

Once again, Microsoft is back in the UK Courts for overcharging British businesses for the use of Windows Server software. The case was filed in December 2024 by competition lawyer Dr Maria Luisa Stasi and her team at Scott + Scott LLP on behalf of approximately 60,000 UK Businesses.

As of late 2025, the lawsuit is currently before the UK Competition Appeal Tribunal. The tribunal will either grant a Collective Proceedings Order and allow the full trial to take place or stop it from proceedings. Linklaters LLP is reportedly advising Microsoft.

The Accused and The Accusation

In simple terms, there are a few major providers of cloud services: Amazon Web Services, Microsoft Azure, Alibaba Cloud, and Google Cloud. The claim accuses Microsoft of charging higher fees to businesses using Microsoft software (such as Windows and Office) on non-Microsoft cloud services. In this sense, Microsoft is providing better deals for those using Microsoft Azure, making its competitors’ services more costly and inconvenient – an allegedly anti-competitive practice.

While Dr Stasi’s team asserts that the tech giant is abusing their power, Microsoft claims that there is no viable method for assessing the alleged losses and the case should accordingly ‘be thrown out’.

Moreover, Microsoft also claims that they have benefitted competition by allowing its competitors to run the software on their cloud services and maintains the existence of intense market competition.

It is also relevant to note that, back in late July, the Competition and Markets Authority found that Microsoft has reduced competition for cloud services as a result of its licensing practices ‘materially disadvantaging AWS and Google’. Additionally, in November, the EU Commission announced investigations into Microsoft under the Digital Markets Act – though these have yet to yield results.

Implications

Beyond setting a precedent for abusive practices in the digital markets, if the lawsuit continues and Microsoft is found to be anti-competitive, it faces a penalty of up to £2.1 billion and an obligation to change pricing within its licensing practice. A precedent is likely to have global implications and open doors to further lawsuits against dominant tech companies. On the other hand, should the tribunal decide against granting the CPO, antitrust law likely faces a setback or limitation while Microsoft retains its dominance in the cloud and software ecosystem. For businesses and consumers, the outcome could mean either fairer prices and more choices or a lost opportunity for compensation.