Microsoft must face $2.8 billion UK lawsuit over cloud computing licences

LONDON, April 21 (Reuters) - Microsoft must ‌face a ​mass lawsuit ​alleging it overcharged thousands of British businesses to use Windows Server software on cloud computing services provided by Amazon, Google and ‌Alibaba, a London tribunal ruled on Tuesday.

Competition lawyer Maria Luisa Stasi ⁠is bringing the case on behalf of nearly 60,000 businesses that run Windows Server on ‌rival cloud platforms. Her 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 the businesses were overcharged because ​Microsoft charges higher wholesale prices for Windows Server than for users of Azure, costs that are passed on to customers and make Azure cheaper ⁠than Amazon's AWS or Google Cloud.

Microsoft said Stasi's case failed to set out a workable method for ​calculating any alleged losses and should be thrown out.

But London's Competition Appeal Tribunal certified the case to proceed towards trial, an ​early step in the proceedings.

A Microsoft spokesperson ‌said they planned to appeal against Tuesday's decision. "We also dispute the underlying allegations by the class representative (Stasi), and today's decision ⁠makes no final determination on those claims," the spokesperson said.

Stasi said in a statement that the ruling was "an important moment for the thousands of organisations impacted by Microsoft's conduct".

Microsoft argued at ⁠last year's hearing that its vertically integrated business model - using Windows Server as an input ​for Azure while also licensing it to rivals - can benefit competition.

Regulators in Britain, Europe and the U.S. are separately examining the practices of Microsoft and other firms in cloud ‌computing.

Last 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 the report had ignored ⁠that "the cloud market has never been ‌so dynamic and competitive".

Last ​month, the CMA said it would again investigate Microsoft's software licensing practices in the cloud market.

(Reporting by Sam Tobin. Editing by ‌Mark Potter)

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