The Lock-In Ledger: Microsoft's Multibillion-Dollar Battle Over Pre-Owned Licenses
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As a reseller's lawsuit and a massive class action converge in the UK, the fight over secondary software markets could determine if vendor restrictions are keeping licensing fees artificially high.
In the world of enterprise software, the real money isn't just in the initial sale—it is in the lock-in. For Microsoft, that lock-in is currently being tested in the UK's Competition Appeal Tribunal (CAT) through two converging legal fronts that could fundamentally alter how software licenses are traded.
On one side is ValueLicensing (VL), a reseller that sued Microsoft in 2021 for £270 million. As The Register first reported, VL alleges that Microsoft restricted the supply of surplus Office licenses available for resale. On the other side is a massive collective action filed in 2025 by barrister Alexander Wolfson on behalf of more than two million UK customers. This second claim is significantly larger in scale, seeking compensation between £1.3 billion and £3.5 billion.
From a market perspective, this is a fight over the existence of a competitive secondary market. Kate Pollock, head of competition litigation at the law firm Stewarts, told The Register that Microsoft allegedly abused its market dominance by implementing restrictive licensing practices. Pollock argues these practices effectively shut down competition and inflated prices, impacting millions of public and private sector organizations that rely on the software for daily operations.
The procedural machinery is now moving to determine if these two cases will merge or influence one another. Jonathan Horley, the head of ValueLicensing, informed The Register that VL has a case management conference regarding disclosure scheduled for September 14. Immediately following that, on September 15, VL has been invited to a conference regarding the Wolfson proceedings.
Horley described this invitation as "very significant," noting that ValueLicensing possesses evidence and experience regarding the operation of the pre-owned market during the period of the alleged abuse. The September 15 meeting will address how the two claims interact, including whether the Wolfson action should be stayed until a judgment is reached in the more advanced ValueLicensing case. There is also the possibility that the claims will be heard together, though the tribunal has not yet confirmed this path.
Microsoft has already seen some setbacks in the ValueLicensing fight. In July, the Court of Appeal turned down Microsoft's appeals on matters including copyright, though the company maintains the right to seek permission to bring the case before the Supreme Court.
If the courts determine that Microsoft's restrictions on the resale of licenses constitute an abuse of dominance, it would break the artificial ceiling on the secondary market. For the millions of users represented in the Wolfson claim, the result wouldn't just be a one-time payout, but a potential shift in the economics of software procurement.
Microsoft declined to comment on the proceedings when contacted by The Register. A representative for the Alexander Wolfson class action has yet to provide a comment.