UK software reseller sues Microsoft for £270m

A British company is suing Microsoft for £270m in damages in the English High Court, alleging that the US company is trying to crush a multibillion-dollar market in second-hand versions of its software.

ValueLicensing buys pre-owned Microsoft software licences from companies that upgrade their IT or become insolvent, and then resells them across the UK and Europe.

It claims on its website that its customers can save up to 70 per cent by buying used software, and points to one NHS Trust that allegedly saved £1m by using Microsoft Office 2019, rather than the latest version of the office tools suite.

Jonathan Horley, ValueLicensing’s founder, accused Microsoft of harming competition in the used software market by persuading companies to relinquish their perpetual licences, often in exchange for discounts on Microsoft’s cloud-based software, such as Office 365.

“Microsoft has an incentive to move to its new cloud-based model and remove the old licences from the market so customers have no choice but to move to its subscription model,” said Mr Horley, in an interview with the Financial Times.

He accused Microsoft of “abusing its power” and of depriving companies of the option of buying cheaper IT tools. He added that owners of software licences are seeing their value drop, as the resale market shrinks.

Microsoft said it was “unable to comment on ongoing legal cases”.

In February, Microsoft made sweeping changes to its perpetual versions of Office, including cutting the length of time it offers support on the products to five years, unlike the decade of support that Office 2016 received.

In 2013, Microsoft announced it would restrict the resale and sharing of Xbox games by requiring gamers to install games on to its Xbox One console before play, watermarking each copy to its owner in the process. It later backtracked after an outcry from gamers.