Microsoft faces UK class action lawsuit over licensing

Microsoft faces more legal action in the UK, this time from a barrister named Alexander Wolfson who issued an opt-out class action claim this week alleging that public or private organizations in the UK that purchased certain software licenses (including for Microsoft Office and Windows) since October 1, 2015, were overcharged due to Microsoft’s market practices.

Wolfson, who retained the services of Stewarts LLP, a litigation-only law firm, said in a release issued on Wednesday, “Microsoft’s actions have had a significant and far-reaching impact on UK consumers, businesses, and public bodies.”

This claim, he said, “seeks to hold Microsoft to account and to secure compensation for the many affected members of the class. With billions of pounds potentially at stake, this case is about ensuring fairness in the digital marketplace and ensuring even the largest tech companies play by the rules.”

“Microsoft’s conduct has had a profound and costly impact on millions of individuals and private and public sector organizations that rely on its software for daily business operations,” said Kate Pollock, the head of competition litigation at Stewarts. “We believe that Microsoft abused its market dominance by imposing restrictive licensing practices that effectively shut down competition and inflated prices.”

Highlights an industry-wide issue

An FAQ created by the plaintiff explained the format of the suit: “Opt-out collective proceedings are a special form of court proceedings that enable a class representative to bring a claim on behalf of a defined class of persons in the UK affected by an infringement of competition law,” it said. “This means that if your organization fits within the class definition you will automatically be included in the claim and will be bound by any judgment or settlement unless you choose to opt-out of the proceedings.”

Ellora MacPherson, managing director and chief investment officer at Harbour, which has agreed to fund the case, described the suit as “likely to be one of the largest the UK has seen and is an example of how big corporate entities can be held to account.”

Forrester Senior Analyst Dario Maisto pointed out Wednesday via email, “this is not the first time that Microsoft gets attention for allegedly unfair commercial practices. Microsoft was also sued in the UK in 2024 over allegations that it overcharged Windows Server customers to use the software on competing cloud platforms.”

He added, “the Cloud Infrastructure Providers in Europe organization (CISPE) took a similar action on Microsoft’s licensing practices when its cloud computing competitors filed a complaint against Microsoft with the European Commission.”

According to Maisto, “while it is totally understandable why law firms and competitors keep engaging in such lawsuits against Microsoft, we should finally admit that these are all symptoms of a bigger issue, that is, people and organizations’ extreme [dependence] on third-party proprietary solutions and a fundamental lack of alternative standards.”

This is, he said, the problem that we as an IT industry need to solve, as we cannot keep relying on specific lawsuits to address — one at a time — all the problems of what we could start to define now as a much broader market disfunction.” 

Computerworld reached out to Microsoft for a comment but at press time had not received a response.