A UK-based software reseller has filed a £270m lawsuit against Microsoft for what it claims is an abuse of power in the software market.
ValueLicensing, which specialises in the resale of second-hand licences, claims that Microsoft has “stifled the supply of preowned licences” through clauses in customer contacts since “at least 2016”.
The reseller says the clauses give customers a discount on other Microsoft products and services, in exchange for not selling on their redundant licences. ValueLicensing’s business model relies on it being able to buy these licences to sell on.
It also claims that non-disclosure agreements have “eliminated most preowned licences from the market”.
Jonathan Horley, Managing Director at ValueLicensing, said:
“Microsoft’s illegal behaviour has impacted almost every organisation 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 organisations 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 organisations. Its position of economic strength enables it to prevent effective competition from being maintained for preowned perpetual licences because it has the power to behave to an appreciable extent independently of its competitors and taxpayer-funded public-sector organisations and private-sector businesses of all sizes.”
ValueLicensing said that it has lost an estimated £270m in gross profit since 2016 because of Microsoft’s conduct, related specifically to sales of desktop products.
The firm’s High Court claim demands that Microsoft’s clauses are found “illegal and unenforceable”; the NDAs are removed from contracts; and, ultimately, Microsoft ends its “illegal conduct”.
It added that the public sector has been particularly impacted, with the clauses a feature of various framework agreements.
Microsoft told the Financial Times it cannot comment on ongoing legal cases.
