Microsoft is going through a £1 billion lawsuit within the UK over allegations of anti-competitive pricing practices in its cloud computing companies.
The lawsuit claims the tech big unfairly overcharged companies that use rival cloud platforms akin to Amazon Net Companies (AWS), Google Cloud, and Alibaba Cloud to host its widely-used Home windows Server software program.
The case is led by competitors lawyer Maria Luisa Stasi, representing hundreds of UK companies and organizations affected by Microsoft’s pricing insurance policies.
Allegations of overcharging
The lawsuit alleges that Microsoft affords cheaper licensing charges for Home windows Server software program by itself Azure cloud platform whereas charging increased charges for a similar software program hosted on opponents’ platforms.
This, the declare argues, forces prospects to pay extra when selecting different cloud computing options, successfully penalizing companies for not utilizing Azure.
“Put merely, Microsoft is punishing UK companies and organisations for utilizing Google, Amazon, and Alibaba for cloud computing by forcing them to pay more cash for Home windows Server.
“By doing so, Microsoft is attempting to pressure prospects into utilizing its cloud computing service Azure and limiting competitors within the sector,” Stasi acknowledged.
Stasi additional emphasised that the lawsuit seeks to reveal the size of the alleged overcharges and return the cash to affected organizations.
Competitors and regulatory scrutiny
- The lawsuit comes at a time when the U.Ok.’s Competitors and Markets Authority (CMA) is intensifying its scrutiny of anti-competitive practices within the cloud business. A provisional determination from the CMA on this matter is predicted by December 2024.
- Microsoft has confronted comparable accusations in Europe, beforehand settling a 20 million euro antitrust criticism with CISPE, a cloud commerce physique, in March 2024. That settlement led Microsoft to standardize pricing for its software program throughout smaller cloud corporations and Azure.
- Nevertheless, Google filed a contemporary antitrust criticism with the European Fee in September, alleging that Microsoft’s licensing practices limit prospects’ potential to change to different platforms.
Influence on Cloud Market Dynamics
- The broader cloud market has seen important development, however European cloud suppliers have struggled to compete with U.S. giants. From 2017 to 2022, European cloud companies’ market share dropped from 27% to 13%, in accordance with Synergy Analysis Group.
- Solange Viegas Dos Reis, chief authorized officer of French cloud supplier OVHCloud, highlighted issues about hyperscalers like Microsoft bundling software program and infrastructure, making it more durable for third-party platforms to compete.
- OVHCloud reached a separate settlement with Microsoft in July, resolving its personal antitrust criticism.
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