LONDON, April 21 (Reuters) – Microsoft must face a massive lawsuit alleging it overcharged thousands of British companies for using Windows Server software “in cloud computing services provided by Amazon, Google and Alibaba,” a London court ruled on Tuesday.
Competition attorney María Luisa Stasi is bringing the case on behalf of nearly 60,000 companies running Windows Server on rival cloud platforms. His lawyers have previously said the claim was worth up to 2.1 billion pounds ($2.8 billion).
They argued at a hearing last year that companies were overcharged because Microsoft charges higher wholesale prices for Windows Server than for Azure users, costs that are passed on to customers and make Azure cheaper than AWS or Amazon’s Google Cloud.
Microsoft said the Stasi case did not establish a viable method for calculating the alleged losses and should be dismissed.
But the Competition Appeal Tribunal in London certified that the case was progressing towards trial, a first step in the process. Microsoft did not immediately respond to a request for comment.
The Stasi said in a statement that the ruling was “an important moment for the thousands of organizations affected by Microsoft’s conduct.”
Microsoft argued at last year’s hearing that its vertically integrated business model (using Windows Server as an input to Azure while licensing it to rivals) can benefit competition.
Regulators in Britain, Europe and the United States are separately examining the practices of Microsoft and other companies in cloud computing.
Last July, a research group at Britain’s Competition and Markets Authority said Microsoft’s licensing practices reduced competition for cloud services “by materially harming AWS and Google.”
Microsoft said at the time that the report had ignored that “the cloud market has never been so dynamic and competitive.”
Last month, the CMA said it would re-investigate Microsoft’s software licensing practices in the cloud market.
($1 = 0.7402 pounds)
(Reporting by Sam Tobin. Editing by Mark Potter)