A United Kingdom software reseller has accused Microsoft of abusing its position as a technology giant to persuade enterprises to upgrade to new versions of its products, instead of considering pre-owned alternatives.
ValueLicensing, which buys and resells pre-owned Microsoft software licenses from companies that have upgraded their equipment, said on Thursday it has launched legal action. It is seeking 270 million pounds ($371 million) in damages in the English High Court over its belief that the United States company has used its advantage to stifle competition.
Jonathan Horley, ValueLicensing’s founder, told the Financial Times that competition in the used software market was effectively being restricted by Microsoft’s ability to use its position to persuade companies to give up their perpetual licenses in exchange for such things as discounts on new cloud-based software, such as Office 365.
“Microsoft has an incentive to move to its new cloud-based model and remove the old licenses from the market, so customers have no choice but to move to its subscription model,” he said.
Horley claimed the practice amounted to an abuse of power and a denial of enterprises’ option of seeking out cheaper software alternatives.
The Financial Times said Microsoft made massive changes to its perpetual versions of its premier brand, Office, back in February, including shortening the length of time it supports the software. Critics have said the move makes it harder for people to hang onto software and easier for them to simply upgrade to new versions of Microsoft products.
The Daily Telegraph Newspaper said Microsoft had “dramatically” changed its image since it was involved in a prominent antitrust case in the US back in 2001, so the lawsuit involving ValueLicensing will be unwelcome.
The paper said it is now extremely rare for the company to be involved in such cases, especially ones brought by British companies.
Horley told The Telegraph: “Microsoft’s illegal behavior has impacted almost every organization that provides desktop software for its workforce in the UK and the (European Economic Area).”
Microsoft has, so far, refused to comment on the case.
Another major tech giant, Apple, also faces legal action from Epic Games, makers of the hit game Fortnite.
In that case, Apple has said it plans to argue in court that it faces “abundant competition” in the video game market.
The suit in federal court in California will look into Epic’s claim, made last year, that the 15 percent to 30 percent commissions Apple charges for the use of its in-app payment systems, and the company’s alleged practice of controlling which apps can be installed on its devices, equate to uncompetitive behavior.