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EU says Microsoft 'possibly' tied Teams to Office suites unfairly, leaving software giant with knotty ongoing investigation

It's "a win" says Slack...prematurely

Photo by Maximalfocus / Unsplash

The European Commission has reached a "preliminary view" that Microsoft has been unfairly tying its Teams platform to Office 365 and Microsoft 365, following a complaint from rival platform Slack. 

The regulator is "concerned" that Teams, Microsoft's cloud-based tool for video calls and messaging, was integrated into these suites without an opt-in and opt-out option. This potentially stifles competition in the communication and collaboration software market, in the Commission's view. 

“We are concerned that Microsoft may be giving its own communication product Teams an undue advantage over competitors,” Margrethe Vestager, Executive Vice-President in charge of competition policy said in a statement this morning. 

The Commission said that Microsoft had given Teams an advantage over its rivals, protecting its dominance of the market, since at least 2019. 

In particular, the Commission is concerned that Microsoft may have granted Teams a distribution advantage by not giving customers the choice whether or not to acquire access to Teams when they subscribe to their SaaS productivity applications. This advantage may have been further exacerbated by interoperability limitations between Teams' competitors and Microsoft's offerings. The conduct may have prevented Teams' rivals from competing, and in turn innovating, to the detriment of customers in the European Economic Area. If confirmed, these practices would infringe Article 102 of the Treaty on the Functioning of the European Union (‘TFEU') – The EC.

In July, 2023, the Commission opened an investigation into possible anti-competitive practices. Since then, Microsoft had introduced changes into the way it distributes Teams, for example, offering some suites without Teams. 

But the Commission stated today: “These changes are insufficient to address its concerns and that more changes to Microsoft's conduct are necessary to restore competition.”

If the commission finds "sufficient evidence of infringement" by Microsoft, it could impose fines amounting to up to 10% of Microsoft’s global annual turnover and demand corrective actions.

This antitrust inquiry began following complaints by Slack Technologies, a rival messaging platform (owned by Salesforce) and alfaview GmbH. 

According to a statement cited on ABC News, Salesforce’s president and chief legal officer, Sebastian Niles, described the Commission’s statementas “A win for customer choice and an affirmation that Microsoft’s practices with Teams have harmed competition.”

He urged the Commission “To move towards a swift, binding, and effective remedy that restores free and fair choice and promotes competition, interoperability, and innovation in the digital ecosystem.”

Microsoft insisted it had already taken steps to resolve the dispute. “Having unbundled Teams and taken initial interoperability steps, we appreciate the additional clarity provided today and will work to find solutions to address the commission‘s remaining concerns.” Brad Smith, Microsoft’s president, said in a statement quoted by the New York Times.