Microsoft faces new antitrust evidence request
A fresh twist in the Microsoft antitrust dispute-first filed before England’s High Court in April 2021-could have major consequences for the corporation. The UK Competition Appeal Tribunal has issued a consent order demanding documents from past and present Microsoft executives that may have a bearing on a £270 million (about $361 million) lawsuit filed by secondhand software reseller ValueLicensing.
ValueLicensing contends that Microsoft provided incentives encouraging customers to move to subscription models while refusing to let them sell their used licenses. At the heart of this matter lies an old internal deck titled “Second-Hand Software,” which the consent order labels as a “known adverse document.”
The specific content of the presentation has not yet been made public, but Microsoft has until October 31 to explain why it did not disclose the presentation earlier. Further, a confidentiality designation that previously applied to 11 documents relevant to the case has been lifted.
Allegations Against Microsoft
EU regulations permit the resale of perpetual, pre-owned software licences, and a vendor’s Terms of Service cannot override that entitlement. ValueLicensing operates within this secondary market, trading licences for Microsoft products such as Windows and Office.
According to ValueLicensing, Microsoft has throttled the availability of these used licences across the United Kingdom and the European Economic Area, which spans 27 EU and non-EU states. The reseller claims the tech giant misused its dominant position and entered into contracts that “prevented, restrained or distorted competition” by tying resale restrictions to subscription-price discounts.
Consent Order and Next Steps
The consent order is asking Microsoft to provide its “view” of whether those allegations are true, and to make “reasonable endeavors” to contact former COO Kevin Turner, former president and EVP Jean-Philippe Courtois, and former corporate VP of worldwide licensing and pricing Joe Matz. The company must document that it has done so by November 30.
Read Also: Salesforce outage halts services for 7.5 hours
Microsoft is also being asked to search for specific terms in the emails and document repositories of Matz, Courtois, Turner, and several other named current and past research managers, former VPs and presidents, between July 2012 and June 2020. The more than 40 search terms include “SHS,” “antitrust,” “competition,” “ValueLicensing,” “used licenses,” “do nothing,” “competition,” “revenue,” and “discount licensing.”
Implications for Enterprise Leaders
For chief information officers, procurement heads and IT finance managers, the latest turn carries “practical implications,” according to Forrester senior analyst Dario Maisto. Companies that have surrendered perpetual licences or accepted contractual bans on resale during an enterprise-agreement renewal or a shift to the cloud may have forfeited measurable asset value.
Maisto advises CIOs to watch for licensing “penalties” or inflated expenses when running legacy applications on third-party clouds such as AWS or GCP compared with Azure.
These documents cannot be designated “restricted” or “confidential,” according to the consent order. They must also be disclosed by November 30.
The case is set to continue, with Microsoft facing scrutiny over its licensing practices and the potential impact on the secondary software market.
