Microsoft faces £1 billion lawsuit in UK for allegedly overcharging rival cloud firms’ customers
UKRAINE – 2022/01/07: In this photo illustration a Microsoft Azure logo seen displayed on a smartphone. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images)
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LONDON — Microsoft on Tuesday was accused of unfairly overcharging customers of rival cloud companies in a lawsuit claiming damages of more than £1 billion ($1.27 billion).
The lawsuit alleges customers using Amazon Web Services (AWS), Google Cloud Platform or Alibaba Cloud — all key competitors to Microsoft’s Azure cloud — are forced to pay more to license the tech giant’s cloud-based Windows Server software on rivals’ infrastructure.
Microsoft offers a cheaper price to firms running Windows Server on Azure than on direct competitors like AWS, Google’s cloud or Alibaba Cloud. The lawsuit argues firms running the widely-used server software are essentially being overcharged to use alternative cloud computing solutions.
It adds Microsoft leverages its dominant market position in cloud-based server operating systems by extracting higher prices and inducing customers into moving to Azure. Claimant Maria Luisa Stasi, a competition lawyer, is seeking more than £1 billion in compensation for firms affected.
Microsoft was not immediately available for comment when contacted by CNBC.
“Put simply, Microsoft is punishing UK businesses and organisations for using Google, Amazon and Alibaba for cloud computing by forcing them to pay more money for Windows Server,” Stasi, who is head of law and policy for digital rights advocacy group Article19, said in a statement shared with CNBC.
“By doing so, Microsoft is trying to force customers into using its cloud computing service Azure and restricting competition in the sector.”
She added the lawsuit “aims to challenge Microsoft’s anti-competitive behavior, push them to reveal exactly how much businesses in the UK have been illegally penalized, and return the money to organizations that have been unfairly overcharged.”
Thousands of British businesses and organizations are represented in the lawsuit, which is an “opt-out” collective action. That means that any company potentially affected is automatically counted and can receive a payout if Microsoft loses.
Stasi represents the customers of Amazon, Google and Alibaba but doesn’t represent any of these firms, her spokesperson told CNBC.
CMA preparing competition remedies
The development comes as the U.K.’s Competition and Markets Authority is preparing “behavioral” remedies addressing anti-competitive practices in the cloud industry following a months-long probe, with two sources telling CNBC last month a provisional decision could come as soon as this week.
The CMA declined to comment on the specific timing of its provisional decision. However, it’s previously set a deadline of November to December 2024.
Earlier this year, Microsoft struck a 20 million euro ($21 million) settlement with cloud trade body CISPE and its members ending an EU antitrust complaint accusing the tech giant of unfair software licensing practices at its cloud division.
The deal saw Microsoft agree to charge firms the same price for running its software on smaller cloud companies’ systems as it does on its own Azure platform.
But in September, Google filed a fresh antitrust complaint against Google with the European Commission, the executive body of the EU.
The suit alleged that Microsoft’s software licensing terms effectively lock businesses into its Azure platform and make it harder to switch — and thus exerting control over the cloud market.
Solange Viegas Dos Reis, chief legal officer of French cloud computing firm OVHCloud, told CNBC some cloud hyperscalers are essentially “selling together two products that should be totally separated” — widely-used software and cloud infrastructure.
There’s also an issue of hyperscalers offering more functionality of their software when it’s running on their own cloud services than on third-party cloud services, Dos Reis said without singling out any particular vendor.
From 2017 to 2022, European cloud firms’ market share halved from 27% to 13%, lagging international rivals as the entire European cloud market grew fivefold to 10.4 billion euros ($11 billion), according to data from Synergy Research Group.
The issue of software licensing in cloud is one that’s not been assessed previously, Dos Reis told CNBC in an interview last week, adding OVH has “a lot of hope” with the CMA’s cloud competition case.
OVHCloud agreed its own settlement with Microsoft in July, which saw it drop its own EU antitrust complaint against the U.S. tech giant.
An Amazon worker moves boxes on Amazon Prime Day in the East Village of New York City, July 11, 2023.
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Amazon is extending its Prime Day discount bonanza, announcing that the annual sale will run four days this year.
The 96-hour event will start at 12:01 a.m. PT on July 8, and continue through July 11, Amazon said in a release.
For the first time, the company will roll out themed “deal drops” that change daily and are available “while supplies last.” Amazon has in recent years toyed with adding more limited-run and invite-only deals during Prime Day events to create a feeling of urgency or scarcity.
Amazon launched Prime Day in 2015 as a way to secure new members for its $139-a-year loyalty program, and to promote its own products and services while providing a sales boost in the middle of the year. In 2019, the company made Prime Day a 48-hour event, and it’s since added a second Prime Day-like event in the fall.
Prime Day is also a significant revenue driver for other retailers, which often host competing discount events.
Technology
SK Hynix shares extend gains to over 2-decade highs as parent group reportedly plans AI data center
OpenAI CEO Sam Altman speaks during the Snowflake Summit in San Francisco on June 2, 2025.
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OpenAI has been awarded a $200 million contract to provide the U.S. Defense Department with artificial intelligence tools.
The department announced the one-year contract on Monday, months after OpenAI said it would collaborate with defense technology startup Anduril to deploy advanced AI systems for “national security missions.”
“Under this award, the performer will develop prototype frontier AI capabilities to address critical national security challenges in both warfighting and enterprise domains,” the Defense Department said. It’s the first contract with OpenAI listed on the Department of Defense’s website.
Anduril received a $100 million defense contract in December. Weeks earlier, OpenAI rival Anthropic said it would work with Palantir and Amazon to supply its AI models to U.S. defense and intelligence agencies.
Sam Altman, OpenAI’s co-founder and CEO, said in a discussion with OpenAI board member and former National Security Agency leader Paul Nakasone at a Vanderbilt University event in April that “we have to and are proud to and really want to engage in national security areas.”
OpenAI did not immediately respond to a request for comment.
The Defense Department specified that the contract is with OpenAI Public Sector LLC, and that the work will mostly occur in the National Capital Region, which encompasses Washington, D.C., and several nearby counties in Maryland and Virginia.
Meanwhile, OpenAI is working to build additional computing power in the U.S. In January, Altman appeared alongside President Donald Trump at the White House to announce the $500 billion Stargate project to build AI infrastructure in the U.S.
The new contract will represent a small portion of revenue at OpenAI, which is generating over $10 billion in annualized sales. In March, the company announced a $40 billion financing round at a $300 billion valuation.
In April, Microsoft, which supplies cloud infrastructure to OpenAI, said the U.S. Defense Information Systems Agency has authorized the use of the Azure OpenAI service with secret classified information.
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