Microsoft is facing a multibillion-dollar class action in the UK, intensifying global scrutiny of its cloud computing practices and licensing model.

Britain’s Competition Appeal Tribunal has allowed a £1.7 billion (A$3.7 billion) lawsuit to proceed to trial, with claimants arguing the company abused its dominance in server software to overcharge customers.

The case, led by digital markets expert Maria Luisa Stasi, represents around 59,000 UK businesses and organisations.

At the centre of the claim is Microsoft’s Windows Server licensing. Plaintiffs allege the company charged higher fees for customers running the software on rival cloud platforms such as AWS and Google Cloud, effectively steering users toward its own Azure platform.

The tribunal ruled the case has a “reasonable prospect of success,” marking a significant step forward for one of the largest competition claims in the UK tech sector. If successful, compensation could reach up to £2.1 billion (A$4.2 billion).

Microsoft has pushed back strongly, confirming plans to appeal and disputing the allegations. The company says the ruling does not determine the outcome of the case.

The lawsuit lands amid broader regulatory pressure, with UK and EU authorities already investigating Microsoft’s cloud licensing practices and potential impacts on competition in the fast-growing cloud market.