Microsoft is facing legal action in Britain over an allegation that thousands of firms utilizing cloud computing services supplied by Amazon, Google, and Alibaba may be paying higher license costs to use Windows Server software.

Maria Luisa Stasi, a competition lawyer, filed a lawsuit before the Competition Appeal Tribunal on Tuesday, arguing that British firms and organizations may be due more than $1.27 billion in compensation.

"Put simply, Microsoft is punishing UK businesses and organizations for using Google, Amazon, and Alibaba for cloud computing by forcing them to pay more money for Windows Server," she said.

Stasi explained that by doing this, "Microsoft is trying to force customers into using its cloud computing service Azure and restricting competition in the sector."

Separately, Britain's competition authority is looking at cloud computing, a field dominated by Amazon's AWS, Microsoft's Azure, and, to a lesser extent, Google Cloud Platform.

The authority is looking at Microsoft's licensing practices, such as those for Windows Server and Microsoft 365, and plans to provide an update on its probe soon.

In 2020, Microsoft released new licensing prices for operating its products on key cloud providers, and the claim argues fees were subsequently used to entice users to utilize its Azure platform.

According to data provided in May by the Competition and Markets Authority, Microsoft has been attracting customers at a considerably greater pace than rival cloud providers after changing its license.

A familiar source divulged that the US Federal Trade Commission launched a comprehensive antitrust probe into Microsoft last week, including its cloud computing business.

According to reports, the FTC is investigating charges that the software giant may have abused its market strength in productivity software by imposing onerous license conditions to discourage consumers from switching from Azure to other platforms.