The legal battle between reseller ValueLicensing and Microsoft over perpetual licenses continued through 2024 and is scheduled for trial in 2026.
This was reported by The Register. A recent development arose after ValueLicensing applied for summary legal proceedings in late 2023. However, the UK’s Competition Appeal Tribunal (CAT) rejected the application in a Nov. 28, 2024 ruling.
Horley reported that he would not appeal. He explained that the purpose of the abbreviated proceedings was to clarify exactly what the case against Microsoft is about.
Restrictions in customer contracts
The reseller sued Microsoft in 2021 for £270 million in damages, alleging that the U.S. software and cloud company included restrictions in customer contracts to prevent the resale of perpetual licenses. This in exchange for a discount on subscriptions.
Microsoft’s desire to move customers to a subscription model is well-documented. It is certainly not the only tech giant pursuing such a shift. However, according to ValueLicensing, Microsoft has stifled the supply of used perpetual licenses by this action.
A Microsoft spokesman reported to The Register that he believes ValueLicensing’s complaint is that the tech giant gave customers the option to apply the value of their licenses for older products to new cloud subscriptions. This instead of selling them to third parties. Microsoft argues, however, that the company is helping customers move to the cloud. And that in doing so, one is improving their productivity and security.
Inconsistent defense
However, the CAT agrees with ValueLicensing that Microsoft’s defences were inconsistent. According to the CAT, the ruling indicates that, on the one hand, Microsoft claims in its main defence that the disputed terms had little effect and were not enforced, while on the other hand, it claims in alternative defences that these conditions were necessary to protect its commercial interests.
The tribunal adds that ValueLicensing believes that these positions cannot be reconciled. Microsoft responds that the alternative defences depend on the error in its primary defence that there is no market distortion. Microsoft argues that that may be their position, but it concedes that ValueLicensing is right that it is difficult to reconcile these alternative positions.
Meanwhile, ValueLicensing has quit while the legal battle continues.