British software licence reseller ValueLicensing has a trial date for the first part of a £270m legal showdown against Microsoft after accusing the US behemoth of breaking UK and EU competition laws.
A High Court hearing of Microsoft's attempt to strike out ValueLicensing's case will take place on 30-31 March 2022, the British company announced in a statement today.
Jon Horley, founder and MD of ValueLicensing, said: "This High Court claim covers the damage to our business through Microsoft's abuse of its dominant market position, effectively destroying the pre-owned software market for desktop products. We are not the only victim to have suffered loss as a result of Microsoft's anticompetitive activity since 2016."
Redmond, alleges ValueLicensing in particulars of claim served on Microsoft, has been playing fast and loose with software licences in the hope of killing off the second-hand software licence market. Established law says once a vendor has sold a software licence, that licence becomes a tradeable commodity.
Microsoft, however, has been moving to cloud-based subscription models for its software products instead of the old buy-once-use-forever licence model. ValueLicensing claims MS has been offering its customers anti-competitive contractual terms to surrender these perpetual licences in exchange for time-limited, software-as-a-service (SaaS) subscriptions. If you, a SaaS consumer, stop paying Microsoft then under the SaaS model you lose all your access to Microsoft products, such as Outlook, Office 365, and Azure.
ValueLicensing says this action by Microsoft is an unlawful distortion of the market intended to harm its second-hand licence competitors, alleging the US company has secured the surrender of up to £41bn in perpetual licences. The reseller buys and sells second-hand Microsoft licences, saying its customers include "NHS trusts and local councils." The company is claiming for £270m in lost profits over the last five years.
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"Since at least 2016, Microsoft has been imposing contractual prohibitions applying to users in the UK and the European Economic Area (EEA), in exchange for pricing discounts on Office 365 product lines," said ValueLicensing in a statement today. The reseller added that "this practice has eliminated the vast majority of preowned licenses from the market, preventing potential enterprise customers from buying perpetual licences from companies such as ValueLicensing and thus increasing the cost of ownership for such organisations."
Microsoft has acknowledged service of ValueLicensing's suit, filed against Microsoft Corporation in the US, Microsoft Ltd in the UK, and Microsoft Ireland Operations Ltd. Redmond has taken the normal action of US corporations faced with London lawsuits by applying to have the case struck out and is seeking a judge's declaration that the High Court does not have jurisdiction to hear the case.
MS has yet to file substantive responses with the High Court. ®
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