The European Union has accused Microsoft of violating competition rules by bundling its Teams communication tool with its popular Office 365 and Microsoft 365 productivity suites.
The European Commission issued a statement of objections on Tuesday, stating that it suspects Microsoft of abusing its dominant market position.
The investigation into Microsoft’s practices began in July 2023, following a complaint lodged by Slack, a rival communication platform. The complaint alleged that Microsoft’s integration of Teams into its cloud-based productivity suites was anticompetitive. A second complaint was also received from alfaview GmbH, raising similar concerns.
Microsoft’s Teams is a cloud-based communication and collaboration tool that offers messaging, calling, video meetings, and file sharing. The European Commission’s preliminary findings suggest that since April 2019, Microsoft has restricted competition by tying Teams with its productivity applications, thereby disadvantageous to other communication and collaboration software providers.
The Commission is concerned that Microsoft’s practice of bundling Teams with its SaaS (Software as a Service) productivity applications forced customers to acquire Teams without an option to exclude it.
This practice may have given Teams an unfair distribution advantage and restricted interoperability with competitors, potentially limiting innovation and harming customers in the European Economic Area.
In response to the investigation, Microsoft has made some changes to its distribution model, offering versions of its suites without Teams. However, the Commission found these measures insufficient to alleviate its concerns and indicated that more substantial changes are necessary to restore fair competition.
The statement of objections is a preliminary step in antitrust investigations. It allows Microsoft to respond to the allegations and present its case. If the Commission ultimately finds that Microsoft has infringed EU competition rules, it could impose a fine of up to 10% of the company’s annual worldwide turnover and mandate further remedies to end the anticompetitive behaviour.
Microsoft now has the opportunity to review the Commission’s evidence, respond in writing, and request an oral hearing. The duration of the investigation will depend on various factors, including the complexity of the case and the level of cooperation from Microsoft.
