Microsoft facing multibillion legal claim over how it sells software

Stop us if you've heard this one before

Updated A legal claim has been brought against Microsoft over alleged licensing practices that could result in a multibillion-pound payout for UK customers.

The claim alleges that "the software giant abused its market dominance and engaged in conduct that restricted competition to its new licenses from pre-owned licenses for Microsoft products. That conduct affected and inflated the prices of both new licenses and pre-owned licenses."

The software products concerned include Office and Windows. The claim is on behalf of Brits who bought a license to use one of the products from October 1, 2015. The claim alleges that Microsoft overcharged these customers.

Kate Pollock, head of competition litigation at law firm Stewarts, said: "Microsoft's conduct has had a profound and costly impact on millions of individuals and private and public sector organizations that rely on its software for daily business operations.

"We believe that Microsoft abused its market dominance by imposing restrictive licensing practices that effectively shut down competition and inflated prices."

The proposed class representative, Alex Wolfson, said: "Microsoft's actions have had a significant and far-reaching impact on UK consumers, businesses, and public bodies.

"This claim seeks to hold Microsoft to account and to secure compensation for the many affected members of the class. With billions of pounds potentially at stake, this case is about ensuring fairness in the digital marketplace and ensuring even the largest tech companies play by the rules."

Readers would be forgiven for feeling a sense of déjà vu. In 2021, UK reseller ValueLicensing sued Microsoft for £270 million (c $360 million) over claims of restrictive contractual practices and alleged abuse of dominance.

The crux of the case was an allegation that Microsoft steered customers toward its subscription model and restricted them from selling on their existing licenses (in return for a discount). ValueLicensing claims that this alleged stifling of supply hit its business, which includes reselling those licenses. The lawsuit is still ongoing.

Microsoft was also sued in the UK in 2024, in another collective action, for more than £1 billion ($1.32 billion), over allegations that it overcharged Windows Server customers to use the software on competing cloud platforms.

In that instance, it is being alleged that Microsoft "illegally penalized" customers for running Windows Server somewhere other than Azure. That case is also still ongoing.

The Cloud Infrastructure Providers in Europe organization (CISPE) took a similarly dim view of Microsoft's licensing antics when the cloud computing rivals filed a complaint against Microsoft with the European Commission in 2022, but withdrew its complaint to the European Commission after receiving a payout from the software giant. However, there is every chance that the spat might resume if Microsoft does not provide evidence of its progress toward delivering a Hoster Product (effectively a version of Azure Local) that will satisfy CISPE – which was part of the commitments it made to settle the EC complaint.

The Register asked Microsoft to comment. ®

Updated at 1642 UTC on May 14, 2025, to add

Following publication of this article, a Microsoft spokesperson told us: "This new collective action is based on the same unsubstantiated claims regarding second-hand software licensing that have been litigated for several years in another case. Microsoft believes these claims are meritless and will vigorously defend against them."