Microsoft faces multibillion-pound UK legal battle over software license resale

Microsoft is fighting a dual legal front in the United Kingdom as two major lawsuits challenge the company's control over the resale of perpetual software licenses. The legal actions allege that the tech giant systematically restricted the supply and sale of pre-owned licenses to push customers toward subscription-based models like Microsoft 365.

The first of these actions is a £270 million antitrust suit filed by reseller ValueLicensing in the UK High Court in 2021. ValueLicensing claims that Microsoft restricted the supply of surplus Office licenses to eliminate competition within the secondhand market. More recently, in 2025, barrister Alexander Wolfson launched a multibillion-pound opt-out class action on behalf of more than two million UK consumers, businesses, and public bodies. This second claim seeks compensation between £1.3 billion and £3.5 billion, alleging that Microsoft has overcharged customers since 2015.

The Battle Over Perpetual Licenses

At the heart of the dispute is the tension between the "perpetual license" model—where a customer owns the software indefinitely—and the "Software as a Service" (SaaS) subscription model. While EU and UK law generally protect the right to resell software licenses, the plaintiffs argue that Microsoft undermined this right. They contend that the company used specific contractual clauses and incentives to persuade organizations to surrender their licenses rather than selling them on the secondary market. By doing so, the claimants argue Microsoft artificially inflated prices and accelerated the transition to recurring revenue streams.

Industry Implications

If the courts rule against Microsoft, the financial impact could be staggering, potentially resulting in billions of pounds in damages. Beyond the immediate cost, a loss would set a massive legal precedent for the legality of software license resale across the UK. Such a ruling would validate the existence of a competitive secondary market for perpetual licenses, directly challenging Microsoft's strategic pivot toward a subscription-only ecosystem.

The Road Ahead

Microsoft has publicly characterized both the ValueLicensing and Wolfson claims as "unsubstantiated." According to Alexander Wolfson, the company's actions have had a "significant and far-reaching impact" on UK entities. While the core of the legal battle focuses on the restriction of the secondary market, the courts must now determine if Microsoft's business practices crossed the line from aggressive competition into illegal market manipulation. The outcome will likely determine whether the era of software ownership can coexist with the industry's shift toward the cloud.