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Microsoft is accused of exploiting its dominance in the cloud market to unfairly overcharge businesses using rival services like AWS, Google Cloud, and Alibaba Cloud. Let’s break it down.

The issue centers on Windows Server software licensing. Businesses using Microsoft’s software on competitors’ platforms reportedly pay significantly more than those using it on Microsoft’s own Azure cloud platform. Critics claim this practice pushes customers toward Azure, limiting competition and creating a monopoly-like scenario in the cloud computing sector.

Maria Luisa Stasi, a competition lawyer leading the case, describes it as a direct punishment for UK businesses and organizations that choose non-Microsoft cloud solutions. This "opt-out" lawsuit automatically includes thousands of UK businesses, meaning if Microsoft loses, these companies will share the compensation.

This isn’t the first time Microsoft has faced scrutiny over its cloud practices:

Earlier this year, Microsoft settled a €20 million antitrust complaint in the EU, promising to charge the same prices for its software on smaller cloud providers as on its own Azure platform.
In September, Google filed a fresh antitrust complaint in the EU, accusing Microsoft of locking businesses into Azure through restrictive licensing.
But this UK lawsuit ups the stakes. The country’s Competition and Markets Authority (CMA) is already investigating anti-competitive practices in the cloud sector, with a provisional decision expected soon. If they find Microsoft guilty, it could lead to major reforms in cloud pricing and licensing.

Why does this matter?

The cloud computing market is booming, but it’s dominated by a few "hyperscalers" like Microsoft, Amazon, and Google. Smaller providers struggle to compete, and this lawsuit highlights how unfair practices could be stifling innovation and driving up costs for businesses.

Between 2017 and 2022, European cloud providers saw their market share shrink from 27% to 13% as global giants tightened their grip. These trends raise serious questions about whether the market is competitive enough to allow innovation to thrive.

Microsoft’s response to the lawsuit? A simple “no comment.”

What’s next?

If the lawsuit succeeds, it could force Microsoft to refund overcharged businesses and change its cloud licensing practices worldwide. This might level the playing field, creating more opportunities for smaller cloud providers and reducing costs for businesses.

But it also serves as a warning to Big Tech: the era of unchecked dominance in the cloud market might be coming to an end.

Will this reshape the cloud computing landscape? Let us know your thoughts in the comments.

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