There’s a new development in a Microsoft antitrust case, originally filed in England’s High Court in April 2021, and it doesn’t look good for the tech giant.

A consent order from the UK Competition Appeal Tribunal is demanding documents from past and present Microsoft executives that may have a bearing on a £270 million (about $361 million) lawsuit filed by secondhand software reseller ValueLicensing. The company alleges that Microsoft offered incentives to customers to shift to subscription services without selling their pre-owned licenses.

Central to this development is a historic, potentially damning internal “Second-Hand Software” (SHS) presentation, referred to in the consent order as a “known adverse document.” The specific content of the presentation has not yet been made public, but Microsoft has until October 31 to explain why it did not disclose the presentation earlier.

Further, a confidentiality designation that previously applied to 11 documents relevant to the case has been lifted.

These developments represent “an inflection point in European tech litigation,” said Forrester senior analyst Dario Maisto.

“For Amazon (AWS), Google, and Microsoft, the signal is clear: Antitrust tribunals are fully comfortable examining software licensing mechanics as tools of anticompetitive lock-in.”

The allegations against Microsoft

Under EU law, it is fully legal to resell perpetual pre-owned (“second hand”) software licenses; software makers cannot use their Terms of Service (ToS) to override this right. ValueLicensing specializes in this secondary market, re-selling licenses for products including Microsoft Windows and Microsoft Office.

But the company alleges that Microsoft has stifled the supply of these pre-owned licenses in the UK and the European Economic Area (EEA) comprising 27 European Union member and non-member countries. It says Microsoft abused its market dominance and entered into agreements that “prevented, restrained or distorted competition” via clauses restricting customers from reselling their Microsoft perpetual licenses in return for subscription service discounts.

“The net result has been higher prices and less choice for customers, who have been steered into cloud-based Office365 and Azure subscriptions,” ValueLicensing claimed, pointing out that many enterprises, as well as publicly-funded organizations, rely on pre-owned Microsoft licenses to keep operating costs low.

The consent order is asking Microsoft to provide its “view” of whether those allegations are true, and to make “reasonable endeavors” to contact former COO Kevin Turner, former president and EVP Jean-Philippe Courtois, and former corporate VP of worldwide licensing and pricing Joe Matz. The company must document that it has done so by November 30.

The company must also file a witness statement from a former consultant addressing who within the company was aware of the SHS presentation and when they became aware of it; why the presentation was not disclosed as a “known adverse document”; when in-house legal counsel became aware of the presentation; what steps were taken to check for these types of “known adverse documents”; and the decision making process within the company when the presentation was located.

Microsoft is also being asked to search for specific terms in the emails and document repositories of Matz, Courtois, Turner, and several other named current and past research managers, former VPs and presidents, between July 2012 and June 2020.

The more than 40 search terms include “SHS,” “antitrust,” “competition,” “ValueLicensing,” “used licenses,” “do nothing,”  “competition,” “revenue,” and “discount licensing.” These documents cannot be designated “restricted” or “confidential,” according to the consent order. They must also be disclosed by November 30.

A witness statement from deputy general counsel Cynthia Randall has been paused.

Microsoft has said that any abuse of dominance was “objectively justified” and that the contractual terms at issue were “necessary and reasonable.” It also argued that anti-competitive effects were “outweighed by and proportionate to” certain benefits and efficiencies.

The company did not reply to a request for comment.

Microsoft is facing similar antitrust allegations from UK barrister Alexander Wolfson, who issued an opt-out class action claim in May 2025 alleging that public and private UK organizations that purchased software licenses, including those for Microsoft Office and Windows, were overcharged over a 10 year period due to Microsoft’s market practices.

Wolfson said in a release at the time that Microsoft’s actions had a significant and far-reaching impact on UK consumers, businesses, and public bodies. “With billions of pounds potentially at stake, this case is about ensuring fairness in the digital marketplace and ensuring even the largest tech companies play by the rules,” he wrote.

Implications for enterprise leaders

For enterprise CIOs, procurement leads, and IT financial managers, the current development holds “practical implications,” said Forrester’s Maisto: Organizations that surrendered perpetual licenses or agreed to contractual restrictions against reselling software as part of an enterprise agreement (EA) renewal or cloud commitment may have given up quantifiable asset value.

“The secondary market for perpetual licenses remains legally valid,” he pointed out.

CIOs should pay close attention to licensing “penalties” or inflated costs for running legacy software on third-party clouds, like AWS or GCP, versus Azure, he said. They should also evaluate the benefits of hybrid licensing strategies. Combining pre-owned perpetual licenses for static workloads with cloud subscriptions for dynamic workloads can yield significant cost savings compared to all-subscription models, Maisto pointed out.

Finally, he urged, “use these rulings as leverage during Microsoft agreement renewals.”

This article originally appeared on Computerworld.

Broadcom isn’t playing nicely in the European market, according to a new report by the independent monitoring body European Cloud Competition Observatory (ECCO), which rates Broadcom’s status as “critical” in its most recent analysis of cloud competition in Europe.

The company’s conduct has “deteriorated markedly” since October 2025 due to what ECCO calls “continued and escalating” unfair licensing practices, delay tactics and “procedural obstruction” in the European Commission’s antitrust investigation, and “wholly misleading” sovereignty claims in the European market.

“These developments represent a serious and continuing attempt by Broadcom to restructure the market in its favor,” the group claimed. “This is a threat not only to the viability of European cloud infrastructure providers, but to the integrity of EU competition enforcement.”

SAP, meanwhile, is at “amber status,” meaning there are escalating concerns in the European market due to newly-introduced API restrictions and changes to agentic AI licensing that could stifle competition.

Microsoft, for its part, remains in good standing, and has made progress relative to previously-raised concerns.

Grievances against Broadcom

ECCO is made up of members of the Cloud Infrastructure Services Providers of Europe (CISPE), as well as European customer organizations. The group rates providers in its regular reports with by color: Red means no meaningful progress has been made, amber represents stalled progress or barriers to resolution, and green signals significant and sufficient progress made regarding specific issues.

In this latest report, Broadcom sits firmly in the red category. ECCO cited several concerns.

For starters, the group is raising flags around “market-harming actions” taken by Broadcom, notably the abrupt shutdown of its partner program, and new “severe” restrictions to its Bring Your Own License (BYOL) terms.

In January, Broadcom unilaterally terminated its main reseller program for VMware cloud service provider (CSP) partners. The program had allowed European cloud companies to provide virtualization services that are critical to large cloud deployments. Now, they can no longer offer VMware services “under any terms.”

“Essentially, vast swathes of Europe’s cloud ecosystem were, at a stroke, denied access to a crucial product for which there are no immediate alternatives,” ECCO wrote. The group argued that Broadcom is “systematically exploiting” its dominant position, and taking advantage of the fact that its VMware virtualization software is complex to replace.

Switching can be time-consuming and disruptive to business operations, ECCO said: “Re-engineering, even where it is possible, is a multi-year and multimillion Euro project.”

The group also pointed to a new bring your own license (BYOL) scheme: Customers are now forced to choose from a small group of European companies to host their BYOL workloads. There are few Broadcom Certified Cloud Services remaining, essentially creating lock-in and probably price inflation due “mini-monopolies” in some regions and sectors.

Other licensing concerns center around cost: CISPE members have been reporting license price increases of 10x or more compared to VMware pricing before its 2023 acquisition by Broadcom.

The company has also eliminated overage-based pricing, which allowed CSPs to provision capacity and reconcile usage if in arrears. Now European cloud companies are required to pre-commit to core counts, essentially eliminating the flexibility required when delivering cloud services.

This imposes “severe commercial and operational constraints,” ECCO contended.

Dovetailing with this, CISPE said it has confirmed rumors of a potential kill switch or “degradation mechanism” in VMware’s licensing infrastructure. Broadcom requires compliance reporting every 180 days; failure to do so triggers automated degradation or blocking, thus rendering a customer’s virtualization environment non-functional.

The existence of this mechanism represents an “extraordinary and disproportionate” exercise of market power and raises significant questions about the resilience and security of European digital infrastructure, ECCO said.

Finally, the group pointed to Broadcom’s active obstruction of the European Commission’s antitrust investigation into its VMware acquisition. The company continues to issue legal challenges and requests to suspend proceedings, thus stalling the process, and has invoked its US legal privilege in what seems an attempt to protect potentially damning documents.

ECCO is urging the European Commission to resist attempts to suspend the antitrust investigation and to enforce disclosure obligations even-handedly. “These are not legitimate procedural steps, they are a calculated strategy to delay and dilute effective enforcement,” it said.

SAP is throttling, changing billing

ECCO isn’t entirely thrilled with SAP, either; it calls out “specific, substantial, and … potentially anticompetitive” practices, including traditional antitrust measures that direct customers to its own cloud offerings and impose restrictions on data access for agentic AI.

The group argued that SAP has been throttling data access as a means to control the AI layer. Customers are being offered differentiated, lower grade products unless they migrate to SAP’s own cloud infrastructure.

This follows an ongoing trend by the company: In July 2023, SAP announced that all future innovations would be delivered cloud-first. But facing backlash, the company backtracked, saying in early 2026 that its AI, Joule, and other cloud-first tools would be available to on-prem customers.

There was a caveat, though: New products and features would only be made available to customers committing to transition to RISE with SAP, the company’s subscription-based ERP migration platform.

SAP also announced software billing changes at its Sapphire 2026 conference. Historically, the company has charged consumption-based pricing (that is, the more software is used, the higher the cost), but it plans to shift to imposing capacity-based (per-server) pricing on its partners, with caps for certain scenarios.

This will immediately make it more expensive to offer SAP services on non-SAP clouds, will favor large companies that can spread costs across a wide customer base, and will potentially price out smaller players offering SAP alongside other cloud service offerings, ECCO argued.

These developments “raise serious concerns about foreclosure of third-party competition in the emerging enterprise AI market,” ECCO said.

On a positive note, ECCO credited Microsoft’s decision to “harmonize” the cost of extended security updates across customers, regardless of choice of cloud. This addressed a previous complaint by CISPE and demonstrates the company’s “continued willingness” to recognize and respond to concerns raised by relevant stakeholders. Redmond has also engaged in new collaborations under the European Cloud Accelerator, including the co-development of cloud-based onboarding for SMEs.