Microsoft is facing a £1 billion class action lawsuit in the UK over claims that it overcharged companies and organisations here for access to cloud services.

The suit has been filed to the Competition Appeal Tribunal by Dr Maria Luisa Stasi, a digital markets regulation expert, and law firm Scott+Scott.

The ‘opt-out’ collective claim automatically represents all UK businesses which bought licences for Microsoft’s Windows Server via rival cloud platforms such as Amazon’s AWS, Google Cloud and Alibaba Cloud.

Organisations which rely heavily on access to systems through the cloud can either use Microsoft’s Azure platform or enter into an agreement with the likes of Amazon and Google, which then licence software from Microsoft.

The claim alleges that customers using rival cloud computing platforms were charged higher licensing fees to access its Windows Server and are collectively owed more than £1bn in compensation.

The claim asserts that Microsoft is guilty of anti-competitive practices as it looks to sell Azure. Google also accused Microsoft of such practices earlier this year as part of UK regulator the Competition and Markets Authority’s ongoing investigation into the cloud computing industry in the UK. Microsoft subsequently denied this.

Why storytelling is the key to success on TikTok

“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,” Dr Stasi said of her collective action.

“By doing so, Microsoft is trying to force customers into using its cloud computing service Azure and restricting competition in the sector.

“This lawsuit aims to challenge Microsoft’s anti-competitive behaviour, push them to reveal exactly how much businesses in the UK have been illegally penalised, and return the money to organisations that have been unfairly overcharged.”

BusinessCloud has approached Microsoft for comment.

James Hain-Cole, partner at Scott+Scott UK, said: ““Collective actions level the playing field and allow organisations to fight back against anti-competitive behaviour from some of the biggest companies in the world.

“Dr Stasi’s case against Microsoft aims to do exactly that. We are proud to support her efforts to secure compensation for the class and hold Microsoft to account for its conduct that affects businesses and organisations across the UK economy.”

techUK makes 8 recommendations to correct regional imbalances