ValueLicensing secures financial backing in £270m case against Microsoft

Microsoft is alleged to have broken competition law by keeping old licenses off the market

Preowned software license reseller ValueLicensing has secured a primary funder in its ongoing legal battle with Microsoft, it has announced.

The funding will cover legal costs and the fees for other professional advisors until the £270m antitrust case against the vendor reaches its end.

ValueLicensing alleges that, since at least 2016, Microsoft has been "imposing contractual prohibitions" in the UK and European Economic Area which prevent customers from selling on old licenses, in exchange for discounts on other products.

The reseller argues that this has eliminated "the vast majority" of preowned licenses on the market, preventing companies like ValueLicensing from selling perpetual licenses as Microsoft's customers moved to subscription-based services.

"That a primary funder has backed us is testament to the fact that there is a case to answer which will be heard in due course," managing director Jonathan Horley said.

"I have been involved in the preowned market for 20 years and I know that competing with Microsoft and its worldwide influence is difficult.

"For ValueLicensing to confront the second largest company in the world in the High Court is a different matter, given the Goliath like resources of Microsoft. That is why funding to the end of litigation is essential."

In an interview with CRN last month, Horley claimed Microsoft's alleged activity meant "the cupboard was bare" for preowned licence resellers at a time when there should have been a large volume of licenses on the market.

The lawsuit claims this has led to the company losing sales which would have equated to a gross profit of around £270m, while ValueLicensing is also seeking "to ensure that Microsoft brings such conduct to an end quickly and effectively, and refrains from any measures with the same or equivalent effect".

Microsoft is alleged to have broken section 18 of the Competition Act 1998 and articles of the Treaty on the Functioning of the European Union.

The vendor says that it has now removed an offer which had allowed customers to move to the cloud by allowing them to apply the value of their old licenses to a new subscription.