Double trouble for Microsoft as pre-owned software licenses claims converge
ValueLicensing (VL), which is pursuing a £270 million claim against Microsoft over restricted resale of surplus Office licences, has been invited to a case management conference in a separate multibillion-pound class action against the company. Both cases sit before the UK's Competition Appeal Tribunal and allege Microsoft unfairly restricted the market for pre-owned software licences, meaning closer procedural ties between them could strengthen the pressure on Microsoft's defence.
VL sued Microsoft in 2021, while barrister Alexander Wolfson is proposed class representative in a 2025 claim on behalf of more than two million UK customers seeking between £1.3 billion and £3.5 billion. VL has a disclosure hearing on 14 September, followed by an invitation to the Wolfson case's hearing on 15 September, which may examine whether the Wolfson action should be paused pending VL's more advanced case, or whether the two could eventually be heard together. VL's case has already seen the Court of Appeal dismiss Microsoft's appeals, including on copyright, in July, though Microsoft may still seek permission to appeal to the Supreme Court; Microsoft declined to comment.
- VL invited to hearing in linked £1.3bn-£3.5bn Microsoft class action
- Both cases allege Microsoft restricted pre-owned software licence resale
- Cases could be paused, merged or run alongside each other from September
New here? Start with this
Microsoft's Office software works on a licensing model, and a long-running legal question in the UK is whether businesses can resell "pre-owned" licences they no longer need, much like second-hand goods. ValueLicensing, a company that trades in these surplus licences, argues Microsoft has unfairly restricted this resale market, and took Microsoft to court over it in 2021, seeking £270 million in damages. The case is being heard by the Competition Appeal Tribunal, a specialist UK court that deals with competition disputes.
A second, much larger case has since emerged making similar allegations on behalf of a wider group. This one is a class action, meaning it represents a large number of people or businesses collectively, in this instance more than two million UK Microsoft customers, with a barrister named Alexander Wolfson proposed to represent them. The sums involved are far bigger, running into billions of pounds, and the case is also before the Competition Appeal Tribunal.
Because both cases raise the same core allegation against the same company, the tribunal is now considering whether they should be linked in some way, for example by pausing one while the other proceeds, or eventually hearing them together. This matters because how the two cases interact could affect the strength and speed of the overall legal pressure Microsoft faces, and any findings could have wider implications for how software licences are bought, sold and resold in the UK.
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Advocates for the claimants argue that once a business has lawfully bought a perpetual software licence, it should be free to resell surplus copies it no longer needs, just as it could resell any other purchased asset; principles of exhaustion of rights recognised in prior European and UK case law support this view. They contend that Microsoft's restrictions inflate prices, trap customers into buying new licences unnecessarily, and unfairly stifle a legitimate secondary market that would otherwise benefit cost-conscious businesses and public bodies.
The case against
Microsoft and those sympathetic to its position would argue that its licensing terms are contracts freely entered into by customers, and that software differs from physical goods because of the ongoing investment required in development, security and support. They contend that controlling how licences are transferred helps guard against fraud, piracy and unsupported or insecure use in a secondary market, and that undermining this model could reduce the incentive and resources available for future innovation.