Microsoft fights $2.8 billion UK lawsuit over cloud computing licences

Audio By Carbonatix

Enlarge

LONDON, Dec 11 (Reuters) – Microsoft was on Thursday accused of overcharging thousands of British businesses to use Windows Server software on cloud computing services provided by Amazon, Google and Alibaba, at a pivotal hearing in a 2.1 billion-pound ($2.81 billion) lawsuit.

Regulators in Britain, Europe and the United States have separately begun examining Microsoft and others’ practices in relation to cloud computing.

Competition lawyer Maria Luisa Stasi is bringing the case on behalf of nearly 60,000 businesses that use the Windows Server on rival cloud platforms, arguing Microsoft makes it more expensive than on its own cloud computing service Azure.

Stasi is asking London’s Competition Appeal Tribunal to certify the case to proceed, an early step in the proceedings.

Microsoft, however, says Stasi’s case does not set out a proper blueprint for how the tribunal will work out any alleged losses and should be thrown out.

MICROSOFT ACCUSED OF ‘ABUSIVE STRATEGY’

Stasi’s lawyer Sarah Ford told the tribunal that thousands of businesses had been overcharged because Microsoft charges higher prices to those who do not use Azure, making it a cheaper option than Amazon’s AWS or the Google Cloud Platform.

She also said that “Microsoft degrades the user experience of Windows Server” on rival platforms, which Ford said was part of “a coherent abusive strategy to leverage Microsoft’s dominant position” in the cloud computing market.

Microsoft argues that its vertically integrated business, where it uses Windows Server as an input for Azure while also licensing it to rivals, can benefit competition.

In July, an inquiry group from Britain’s Competition and Markets Authority said Microsoft’s licensing practices reduced competition for cloud services “by materially disadvantaging AWS and Google”.

Microsoft said at the time that the group’s report had ignored that “the cloud market has never been so dynamic and competitive”.

($1 = 0.7473 pounds)

(Reporting by Sam Tobin; editing by Barbara Lewis)