By pushing B2B users away from perpetual licenses in favor of software-as-a-service (SaaS), Microsoft has infringed on the EU constitution as well as an old UK competition law according to a reseller suing the software giant in London’s High Court.
As reported by The Register, details regarding the £270m lawsuit brought against the company by ValueLicensing are now in the public domain after Microsoft filed an acknowledgment of service earlier this month.
In its lawsuit, the British reseller alleges that Microsoft’s general licensing terms for its B2B software products broke the UK’s Competition Act 1998 and two articles of the Treaty on the Functioning of the European Union (TFEU).
ValueLicensing also argues that Microsoft abused its dominant position in the global desktop business to effectively kill off the market for resellable perpetual licenses by using heavily discounted subscription offers to entice B2B users to switch to SaaS.
Perpetual license vs SaaS
Only a few years ago, businesses would buy a license from a software maker such as Microsoft to be able to use their software forever. These perpetual licenses could also be bought and sold as standalone, tradeable commodities and this is how ValueLicensing and other resellers made their money.
However, with the move to SaaS and the introduction of Microsoft 365, resellers could no longer sell licenses since users were now paying a subscription fee to use the software giant’s products.