Microsoft’s attempts to have the claims of a 2021 lawsuit over anti-competitive practices quashed were challenged in UK courts this week.
At the March 30-31 hearing, ValueLicensing’s counsel requested that Microsoft’s applications be denied. While the software giant appeared to accept that there were competition law issues to be tried against its operations in the US and Ireland, its lawyers believed there was no reasonable ground for a claim against its UK tentacle.
According to the legal website Law360, Microsoft’s lawyers said in court that its UK tentacle marketed the licenses and “nothing else”.
“How can that be an abuse?” Robert O’Donoghue QC has reportedly asked the court. “How is contacting for payments an abuse?”
At stake is a £270 million ($353 million) lawsuit by British software reseller ValueLicensing, alleging that Microsoft had effectively destroyed the perpetual license resale market by enticing customers to give up those licenses in exchange for a time-limited software-as-a-service subscription.
ValueLicensing’s anti-competition lawsuit alleged that Microsoft’s actions restricted the supply of used licenses and distorted the market.
Microsoft’s latest claim is that its UK branch was only involved in marketing the licenses and that only a small number acquired by ValueLicensing between October 2018 and August 2020 came from companies in the UK.
As far as ValueLicensing is concerned, that’s what it’s all about. “As a result of Microsoft’s conduct, [ValueLicensing’s] ability to acquire licenses has been radically reduced,” it responded in a skeletal argument seen by The register†
As for Microsoft UK, the software giant has argued that ValueLicensing should have argued that that particular arm of the company was liable for antitrust violations “rather than by the single company that VL claims to be part of”.
Not so, ValueLicensing replied. “Microsoft UK is part of the same economic entity (ie enterprise) as Microsoft US and Microsoft Ireland.” In addition, “all three Microsoft defendants are jointly and severally liable,” according to the license seller.
It was also examined whether an English court was even the right place to hear the claim, especially if Microsoft manages to get its UK branch dropped from the claim.
Ireland would be the “obvious” forum, according to Microsoft, as Microsoft Ireland is the entity through which the company licenses in the UK and the EEA.
ValueLicensing’s argument rejects this, pointing out that “the UK is an important affected market” and “the majority of VL’s claims are governed by English law.”
Things seem to be rumbling for a while. ValueLicensing had no comment to comment while the judge was considering the cases.
Microsoft also declined to comment on pending legal matters, but in connection with the licensing restriction in question, a spokesperson told The register“The challenged restriction helped some customers move to the cloud by allowing them to apply the value of their old licenses to a new cloud subscription.
“We have lifted the restriction but continue to offer the discount on cloud subscriptions, which we believe will benefit our customers as they adopt cloud technologies.”
