TechDigits

Tech news
Wednesday, Apr 24, 2024

Microsoft's ‘anti-competitive’ software resale practices lead to £270 million lawsuit, UK vendor claims

Microsoft's ‘anti-competitive’ software resale practices lead to £270 million lawsuit, UK vendor claims

Microsoft has been accused of violating EU and UK competition law by attempting to kill the market for the resale of perpetual licence products like its Office suite in a lawsuit filed by a vendor claiming £270 million in damages.

In its case in the High Court of Justice in London, British reseller ValueLicensing (VL) has said that the tech giant’s general licensing terms and conditions for its business-to-business software products infringe on the UK’s Competition Act (1998), the Treaty on the Functioning of the European Union (TFEU) and the European Economic Area agreement.

According to the particulars of VL’s claim, the company alleges that Microsoft is abusing its dominant position in the “desktop operating system” and “office productivity suite” markets to persuade customers to exchange licences in return for heavily discounted subscription-based models.

"Microsoft has effectively been paying those customers (via those discounts) to protect Microsoft from competition, by restricting the supply of pre-owned licences to Microsoft’s competitors like VL."


This conversion from licensee to subscriber has cut out intermediaries like VL, whose business model involves purchasing and reselling such secondhand licences from companies that have “either migrated to cloud services”, downsized or gone out of business.

Additionally, VL alleges that Microsoft “recently shortened the support period for its perpetually licensed products” as part of a “sustained – and ongoing – campaign to stifle the sale of pre-owned licences for Microsoft software in the UK and EEA.”

It cited as an example of such restrictive practices the recently announced five-year support period for Office 2021 as opposed to the seven-year period of total support offered to Office 2019 consumers. Historically, the company’s policy was to offer 10 years of support, with bug fixes, security updates and tech support.

It also noted the increasing complexity of Microsoft’s licensing terms and conditions, which “until February 2021 were regularly published as a single document; the last English version ran toover 75,000 words.” These conditions are now spread over a number of webpages on its site.

Although filed in April, details of VL’s lawsuit only came into the public domain after Microsoft Corporation in the US and its two co-defendant subsidiaries UK-based Microsoft Ltd. and Microsoft Ireland Operations Ltd. acknowledged receiving legal notice earlier this month.

“Once a licence is placed onto the market in Europe, it is protected from the vendor effectively, they have exhausted their rights once it is placed onto the market,” VL managing director Jon Horley told news portal The Register.

While Microsoft has not commented on the case, it has reportedly signalled its intent to contest the lawsuit. The software giant is preparing a jurisdictional challenge to contest the London High Court’s standing to hear the case. This is likely to be heard only early next year, according to the outlet.

Although VL estimates it is suffering damages to the tune of £87,000 daily (roughly $121,000) in addition to the overall loss of some £270 million (about $375 million) in revenue, Horley said there were “many different ways” for his company to “stay in the game.”

“I’ve stayed in the game for 17 to 18 years. However long this takes, I’ll stay in the game as far as this part is concerned,” he told the site.

If the contracts are struck down and voided, it would have far-reaching repercussions across Europe and the UK for Microsoft’s licensing and sales divisions.

A victory for VL, Horley stated, would effectively mean that “almost every single organisation, and then any organisation that has signed up to [Microsoft’s alleged anti-competitive] terms, is effectively party to an [allegedly] anti-competitive agreement. And that includes governments, for example, in the UK with a digital transformation arrangement,” as cited by The Register.

Newsletter

Related Articles

TechDigits
0:00
0:00
Close
FTX's Bankman-Fried headed for jail after judge revokes bail
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Musk announces Twitter name and logo change to X.com
The future of sports
TikTok Takes On Spotify And Apple, Launches Own Music Service
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner
UK Crypto and Stablecoin Regulations Become Law as Royal Assent is Granted
A Delaware city wants to let businesses vote in its elections
Alef Aeronautics Achieves Historic Milestone with Flight Certification for World's First Flying Car
Google Blocked Access to Canadian News in Response to New Legislation
French Politicians Advocate for Pan-European Regulation on Social Media Influencers
Melinda French Gates Advocates for Increased Female Representation in AI to Prevent Bias
Snapchat+ gains 4 million paying subscribers in its first year
Apple Makes History as the First Public Company Valued at $3 Trillion
Elon Musk Implements Twitter Limits to Tackle Data Scraping, but Faces Criticism for Technical Misunderstanding
EU and UK's Slow Electric Vehicle Adoption Raises Questions About the Transition to Green Mobility
Top Companies Express Concerns Over Europe's Proposed AI Law, Citing Competitiveness and Investment Risks
Meta Unveils Insights on AI Usage in Facebook and Instagram, Amid Growing Calls for Transparency
Crypto Scams Against Seniors Soar by 78% in 2022, Experts Urge Vigilance
The End of an Era: National Geographic Dismisses Last of Its Staff Writers
Shield Your Wallet: The Perils of Wireless Credit Card Theft
Harvard Scientist Who Studies Honesty Accused Of Data Fraud, Put On Leave
Putting an End to the Subscription Snare: The Battle Against Unwitting Commitments
The Legal Perils of AI: Lawyer Faces Sanctions for Relying on Fictional Cases Generated by Chatbot
ChatGPT’s "Grandma Exploit": Ingenious Hack Exposes Loophole in AI, Generates Free Software Codes
The Disney Downturn: A Near Billion-Dollar Box Office Blow for the House of Mouse
A Digital Showdown: Canada Challenges Tech Giants with The Online News Act, Meta Strikes Back
Distress in the Depths: Submersible and Passengers Missing in Titanic Wreckage Expedition
Mark Zuckerberg stealing another idea: Twitter
European Union's AI Regulations Risk Self-Sabotage, Cautions smart and brave Venture Capitalist Joe Lonsdale
Nvidia GPUs are so hard to get that rich venture capitalists are buying them for the startups they invest in
Chinese car exports surge
Reddit Blackout: Thousands of Communities Protest "Ludicrous" Pricing Changes
Nvidia Joins Tech Giants as First Chipmaker to Reach $1 Trillion Valuation
AI ‘extinction’ should be same priority as nuclear war – experts
×