Microsoft is currently defending a wide range of lawsuits and regulatory actions, with the most significant active matters including a 2026 shareholder securities fraud class action over its Azure cloud and AI spending, an antitrust suit accusing it of fixing PC game prices with Valve, a £2.1 billion UK mass claim over cloud licensing, consolidated copyright litigation brought by authors and news publishers over AI training, and an active Federal Trade Commission investigation into its cloud and AI practices. Recent Microsoft lawsuits and regulatory actions also include a resolved European Commission probe into Teams bundling, closed challenges to the Activision Blizzard acquisition, privacy fines in the United States and Ireland, and employment discrimination claims in California.
Shareholder Securities Fraud Case Over Azure and AI
On June 12, 2026, the City of St. Clair Shores Police and Fire Retirement System, a Michigan pension fund, filed a proposed class action against Microsoft in the U.S. District Court for the Western District of Washington. The case, before Judge S. Kate Vaughan, names Microsoft along with CEO Satya Nadella, CFO Amy Hood, and executives Jared Spataro and Rajesh Jha.1CourtListener. City of St. Clair Shores Police and Fire Retirement System v. Microsoft
The complaint alleges that between May 1, 2025, and January 28, 2026, Microsoft made false or misleading statements about the health of its Azure cloud business and the true cost of its AI buildout. According to the suit, the company failed to disclose that Copilot suffered from poor user experience and capacity constraints, that its proprietary AI model ranked well below competitors on industry benchmarks, and that billions in capital expenditure and GPU/CPU capacity were being diverted from Azure to support Copilot.2Scott+Scott Attorneys at Law. Securities Class Action Against Microsoft Corporation
The alleged truth surfaced on January 28, 2026, when Microsoft reported that Azure’s sequential revenue growth had slowed to 39 percent while quarterly capital expenditures surged to $37.5 billion, bringing the first-half fiscal 2026 total to $72.4 billion. Microsoft also disclosed only 15 million paid Copilot seats out of 450 million commercial Microsoft 365 users. The stock fell nearly 10 percent.3MarketScreener. Microsoft Accused of Misleading Investors on Cloud Growth, AI Spending in Shareholder Lawsuit
The suit brings claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The lead plaintiff deadline is August 11, 2026, and no class has yet been certified. Microsoft says the claims lack merit and intends to defend vigorously.3MarketScreener. Microsoft Accused of Misleading Investors on Cloud Growth, AI Spending in Shareholder Lawsuit
PC Game Price-Fixing Suit With Valve
Gamers Max Rockman and Randall Moring filed a proposed class action on May 31, 2026, in the Western District of Washington, accusing Microsoft and Valve Corporation of conspiring to fix PC game prices. The case, Rockman et al v. Microsoft Corporation (No. 2:26-cv-01876), sits before Judge Jamal N. Whitehead.4PACER Monitor. Rockman et al v. Microsoft Corporation, Complaint
The plaintiffs allege that Microsoft and Valve agreed to match the prices of PC games sold on their competing digital storefronts, producing price uniformity that harmed game quality and content. The complaint describes the arrangement as Microsoft “accepting kickbacks” from its rival and asserts violations of federal antitrust law.5Bloomberg Law. Microsoft Accused of Kickback Deals With Valve to Harm PC Gaming The case is in its earliest stages.
£2.1 Billion UK Cloud Licensing Claim
Competition lawyer Maria Luisa Stasi brought a mass claim on behalf of roughly 60,000 UK businesses alleging Microsoft overcharged them by setting higher wholesale prices for Windows Server software when used on rival cloud platforms such as Amazon Web Services, Google Cloud, and Alibaba Cloud rather than on Microsoft’s own Azure service.6Reuters. Microsoft Must Face $2.8 Billion UK Lawsuit Over Cloud Computing Licences
On April 21, 2026, London’s Competition Appeal Tribunal certified the case to proceed on an opt-out basis, finding the claim “apparently viable” with a “good prospect of success.” The tribunal called the legal theory “novel” but concluded it met the threshold for showing class-wide overcharges. The claim alleges breaches of Section 18 of the UK Competition Act 1998 and Article 102 of the Treaty on the Functioning of the European Union.7Competition Appeal Tribunal. Dr Maria Luisa Stasi v Microsoft Corporation, Microsoft Limited and Microsoft Ireland Operations Limited
Microsoft disputes the allegations and argues its integrated business model benefits competition. The tribunal denied Microsoft’s application for permission to appeal the certification decision on May 20, 2026, and the company has renewed that application before the Court of Appeal. A case management conference is scheduled for December 4, 2026.8Competition Appeal Tribunal. Dr Maria Luisa Stasi v Microsoft Corporation – Case Page
The private claim parallels regulatory scrutiny of the same practices. In July 2025, a UK Competition and Markets Authority inquiry group found that Microsoft’s licensing practices “materially disadvantaged AWS and Google.” In March 2026, the CMA opened a separate formal investigation.6Reuters. Microsoft Must Face $2.8 Billion UK Lawsuit Over Cloud Computing Licences
FTC Cloud and AI Investigation
The Federal Trade Commission is conducting an active antitrust probe into whether Microsoft has illegally monopolized the enterprise computing market through its cloud software and AI offerings, including Copilot. As of February 2026, the FTC had issued civil investigative demands to at least six Microsoft competitors, seeking information about the company’s licensing and business practices.9Bloomberg. FTC Ratchets Up Microsoft Probe, Queries Rivals on Cloud, AI The investigation reportedly began under the Biden administration and has continued under the Trump administration.10Reuters. US FTC Ramps Up Scrutiny of Microsoft Over AI, Cloud Practices, Questions Rivals No formal complaint has been filed.
Copyright Litigation Over AI Training
Microsoft and OpenAI face consolidated copyright infringement litigation from authors, publishers, and news organizations who allege the companies used copyrighted works without permission to train the large language models powering ChatGPT and Microsoft Copilot. Plaintiffs include Ta-Nehisi Coates, John Grisham, Jonathan Franzen, Jodi Picoult, The New York Times, and the Daily News.11The Guardian. US Authors’ Copyright Lawsuits Against OpenAI and Microsoft Combined in New York With Newspaper Actions
On April 3, 2025, the U.S. Judicial Panel on Multidistrict Litigation ordered twelve previously separate lawsuits transferred and consolidated for pretrial purposes in the Southern District of New York as In Re: OpenAI, Inc. Copyright Infringement Litigation (No. 1:25-md-03143), before Judge Sidney H. Stein. Additional lawsuits have continued to arrive, including a June 2025 complaint from three authors alleging OpenAI trained its models on books from “shadow libraries” and that Microsoft integrates the resulting models into its own products.12Bloomberg Law. OpenAI Sued by New Set of Authors Over Training Data Copyrights
Discovery has been contentious. In October 2025, Magistrate Judge Ona T. Wang ruled that several of OpenAI’s internal Slack messages about the 2022 deletion of training datasets derived from Library Genesis were not protected by attorney-client privilege and ordered their production. In January 2026, Judge Stein affirmed orders requiring OpenAI to produce a sample of 20 million de-identified ChatGPT conversation logs to both sets of plaintiffs, rejecting OpenAI’s privacy objections.13U.S. District Court for the Southern District of New York. Order re ECF Nos. 413, 428, 479, 504, 615 – In Re OpenAI
OpenAI and Microsoft maintain that their use of copyrighted material for AI training qualifies as fair use. Other courts have delivered mixed signals: a California federal judge ruled in a case involving Anthropic that AI training was “transformative fair use” when works were legally acquired, while a separate judge granted Meta a fair use win but expressed doubts about whether mass training qualifies.12Bloomberg Law. OpenAI Sued by New Set of Authors Over Training Data Copyrights No trial date has been set.
European Commission Teams Bundling Case (Settled)
In July 2023, the European Commission opened a formal antitrust investigation into whether Microsoft abused its market position by bundling its Teams collaboration tool with Office 365 and Microsoft 365. The probe followed a complaint from Slack, owned by Salesforce. Microsoft resolved the matter without a fine. In September 2025, the Commission accepted legally binding commitments requiring Microsoft to offer Office and Microsoft 365 suites without Teams at a reduced price, increase the price gap between bundled and unbundled suites by 50 percent, let customers on long-term licenses switch to Teams-free versions, provide interoperability between competing tools and certain Microsoft products, and enable clients to migrate data out of Teams. The commitments bind the company for at least seven years.14CNBC. Microsoft Avoids Big Fine as EU Accepts Deal to Unbundle Teams
Activision Blizzard Acquisition Challenges (Resolved)
Microsoft’s $68.7 billion acquisition of Activision Blizzard, announced in January 2022, faced regulatory challenges before closing in October 2023. The Federal Trade Commission filed an administrative complaint in December 2022 and sought a preliminary injunction in federal court in Northern California, arguing Microsoft would make Call of Duty exclusive to Xbox or degrade its performance on PlayStation. After a five-day hearing, the district court denied the injunction on July 10, 2023, finding Microsoft lacked the financial incentive to withhold the franchise from rivals. The Ninth Circuit affirmed on May 7, 2025, and the Commission dismissed its own administrative complaint on May 22, 2025, closing the case.15Justia. Federal Trade Commission v. Microsoft Corporation, No. 23-1599216FTC. Microsoft/Activision Blizzard Matter
The UK Competition and Markets Authority initially blocked the deal in April 2023 over cloud gaming concerns. Microsoft restructured the transaction, divesting Activision’s non-EEA cloud streaming rights for 15 years to Ubisoft Entertainment. The CMA approved the restructured deal on October 13, 2023.17CNBC. Microsoft Activision Blizzard Takeover Approved by UK Regulator CMA
Privacy Enforcement
In 2023, the FTC settled with Microsoft over violations of the Children’s Online Privacy Protection Act tied to its Xbox Live service. The agency found that Microsoft collected personal information from children under 13 without verifiable parental consent, provided inadequate privacy notices, retained children’s data for years (including from incomplete signups between 2015 and 2020), and used pre-checked default settings to enable third-party data sharing. The settlement imposed a $20 million civil penalty and required Microsoft to overhaul its Xbox data practices, including obtaining retroactive parental consent for pre-2021 child accounts or deleting them.18Securiti. FTC Microsoft Case
In October 2024, the Irish Data Protection Commission fined LinkedIn Ireland €310 million for GDPR violations related to targeted advertising. The DPC found that LinkedIn lacked a valid legal basis, whether consent, legitimate interests, or contractual necessity, for processing user data for behavioral analysis and ad targeting, and it cited transparency failures.19Irish Data Protection Commission. Irish Data Protection Commission Fines LinkedIn Ireland €310 Million LinkedIn said it believed it had been in compliance but was working to meet the deadline.20TechCrunch. LinkedIn Fined €310 Million in EU for Tracking Ads Privacy Breaches The final fine came in below the roughly $425 million Microsoft had previously reserved.
Employment Discrimination Claims
In August 2024, the California Civil Rights Department reached a $14.4 million settlement with Microsoft over allegations that the company retaliated against employees who took parental, disability, pregnancy, or family caretaking leave. The CRD alleged that women and employees with disabilities were disproportionately affected, facing diminished compensation, performance reviews, bonuses, stock awards, and promotion opportunities. The settlement covers California workers who used protected leave between May 2017 and the court’s entry of the agreement, and requires Microsoft to retain an independent consultant, train managers, and report annually on compliance.21California Civil Rights Department. Civil Rights Department Reaches $14.4 Million Settlement With Microsoft Over Alleged Parental and Disability Leave Discrimination
An earlier case, Moussouris v. Microsoft, filed in 2015 by former senior security strategist Katherine Moussouris, alleged systemic discrimination against women in technical roles on pay, performance evaluations, and promotions, and sought class status on behalf of up to 8,000 employees.22CIO Dive. Women at Microsoft Filed 238 Gender Discrimination, Sexual Harassment Complaints In June 2018, U.S. District Judge James Robart denied class certification, and the Ninth Circuit affirmed in December 2019, applying the Wal-Mart v. Dukes framework and concluding the plaintiffs failed to “identify a common mode of exercising discretion that pervades the entire company.”23Washington Legal Foundation. Moussouris v. Microsoft The named plaintiffs voluntarily dismissed their claims with prejudice in November 2020, ending the case without a settlement.24Civil Rights Litigation Clearinghouse. Moussouris v. Microsoft Corporation
Windows 10 End-of-Support Suit (Dismissed)
In August 2025, consumer Lawrence Klein sued Microsoft in San Diego Superior Court, alleging that ending free support for Windows 10 on October 14, 2025, amounted to “forced obsolescence” designed to push users toward AI-equipped Windows 11 devices and “monopolize the generative AI market.” Klein, who owned two laptops that could not run Windows 11, argued the move would leave an estimated 240 million PCs vulnerable to cyberattacks and demanded Microsoft continue free support until Windows 10’s share fell below 10 percent of all Windows users.25Courthouse News Service. Microsoft Sued for Discontinuing Windows 10 Support Microsoft removed the case to federal court and moved to compel arbitration. The court stayed proceedings in February 2026 for private mediation, and Klein filed a notice of voluntary dismissal on June 12, 2026, ending the case.26CourtListener. Klein v. Microsoft Corporation