UK-based software reseller ValueLicensing is suing Microsoft for £270 million due to the company’s alleged stifling of competition in the software market.
ValueLicensing is a certified provider of pre-owned Microsoft software licenses. The company, which is based in Derbyshire, says it buys licenses from businesses that no longer require them, either because they’re switching to the cloud or have declared insolvency.
Since 2016, however, Microsoft has been urging businesses to give up their licenses in exchange for discounts on its cloud-based services, such as Office 365, rather than sell them on to companies such as ValueLicensing.
ValueLicensing claims that, as a result of these “anticompetitive” restrictions on the resale of perpetual licenses, it has lost hundreds of millions of pounds in revenue.
In a filing with the High Court in London, the company alleges that Microsoft has been abusing its market power as it deprives businesses of the option of buying used IT services. It’s calling for that Microsoft’s clauses to be found “illegal and enforceable”, for NDAs to be removed from contracts, and for Microsoft to end its “illegal” conduct.
ValueLicensing is also asking the UK High Court “to award damages for the loss it has suffered as a result of Microsoft’s conduct”. The company says that the lost UK and EEA sales of desktop products (as a result of Microsoft practices) since 2016 would have resulted in an estimated gross profit of about £270 million.
Jonathan Horley, Managing Director at ValueLicensing, told the Financial Times: “Microsoft’s illegal behavior has impacted almost every organization that provides desktop software for its workforce in the UK and the EEA”
“ValueLicensing is not the only victim. In purchasing software, public and private-sector organizations presently have little option but to move to subscriptions offered by Microsoft, because there are so few preowned perpetual licenses available now, as a result of Microsoft’s campaign to almost entirely drain the market.
“Microsoft is an unavoidable partner. Its software is integral to virtually all organizations. Its position of economic strength enables it to prevent effective competition from being maintained for preowned perpetual licenses because it has the power to behave to an appreciable extent independently of its competitors and taxpayer-funded public-sector organizations and private-sector businesses of all sizes.”