A UK Competition Appeals Tribunal (CAT) has dismissed Microsoft’s objections to a collective action lawsuit brought by UK-based cloud licensees, clearing the way for trial.

The case seeks compensation for approximately 59,000 businesses and organisations over Microsoft’s pricing of Windows Server on Azure versus competing cloud platforms including AWS and Google Cloud – allegations that Microsoft charged less for the software on its own platform than on rivals’. If Microsoft loses, it could face liability of up to £2 billion (c $2.7 billion).

The CAT granted a Collective Proceedings Order (CPO) on an opt-out basis, and said in its judgement that the claim “comfortably passes” the reasonable prospect of success threshold. The CPO – expected to be published within weeks – will set a deadline for businesses to opt out, and may include directions for when hearings begin.

Microsoft’s protestations concerned funding and the merits of the case.

Lead claimant Dr Maria Luisa Stasi called the ruling “an important moment for thousands of organisations impacted by Microsoft’s conduct.”

She added: “For years, Microsoft’s practices have had real financial impact on both public and private organisations. I’m now looking forward to preparing for trial and getting their money back on their behalf.”

A spokesperson for Microsoft said: “We will pursue an appeal of the Tribunal’s decision because it failed to follow recent precedent from the Supreme Court on class action certifications. We also dispute the underlying allegations by the class representative, and today’s decision makes no final determination on those claims.”

The case, filed in December 2024, is one of several legal headaches for Microsoft in the UK. The company is separately appealing a CAT ruling over secondhand software sales in a claim brought by reseller ValueLicensing.

Jonathan Horley, boss at ValueLicensing, said of the class action case heading to trial: “However it pans out, it is very good that MS are being held to account over their strategic move to a subscription model.

“Over the last 15 years, in both the desktop and datacenter environments, VL believes that Microsoft has abused its dominant position to achieve that aim. I believe the Stasi and Wolfson claims are manifestations of that.”

Cloud provider Civo also welcomed the development. CEO Mark Boost said: “Ensuring a level playing field for all providers is essential to fostering innovation, expanding choice, and delivering the best outcomes for customers.”

Microsoft’s alleged licensing practices have drawn scrutiny across Europe and further afield – in 2024, the company settled with EU cloud vendor group CISPE with a payout and commitments to change its practices. CISPE had no comment to make on this latest development. In the same year, Google filed a complaint with the European Commission’s anti-trust team over the matter.

The FTC is examining if Microsoft’s cloud clout crosses the line, and authorities in Japan are investigating if the vendor has violated anti-monopoly laws.

Google and AWS have not commented on the CAT licensing ruling, which sends the case to trial.