Microsoft faces EU antitrust charges for tying Teams to Office Suite

The European Union (EU) has accused Microsoft of anti-competitive behaviour for bundling its Teams video conferencing app with its dominant Office suite.

Key Points

• EU alleges Teams bundling gives it an unfair advantage over rivals like Slack and Zoom.
• This is the biggest non-merger antitrust case against Microsoft since the Windows saga of the early 2000s, which also involved bundling concerns.
• Microsoft previously offered to unbundle Teams in Europe, but the EU sees this as insufficient.
• Microsoft seeks to settle the case and avoid potential fines of up to 10% of its global revenue.
• These charges come amid heightened scrutiny of Microsoft’s partnerships and licencing practices.

In a move raising concerns over Big Tech practices, the European Union (EU) has charged Microsoft with antitrust violations. The accusation centres on Microsoft bundling its Teams communication app with its widely used Office Suite, allegedly giving Teams an unfair edge over competitors like Slack and Zoom.

On Tuesday, the EU issued a charge sheet to the world’s most valuable public company, raising concerns that Microsoft’s video conferencing app Teams was given an “undue advantage,” thereby harming competitors such as Slack and Zoom.

This marks the most significant antitrust case against Microsoft by the EU in over a decade, excluding merger reviews. It echoes a similar case from the early 2000s where the EU challenged Microsoft’s bundling practices with Windows.

Margrethe Vestager, the EU’s executive overseeing competition policy, expressed worries that Microsoft’s bundling strategy “may be giving its own communication product Teams an undue advantage.”

“We are concerned that Microsoft may be giving its own communication product Teams an undue advantage over competitors by tying it to its popular productivity suites for business. If confirmed, Microsoft’s conduct would be illegal under our competition rules. Microsoft now has the opportunity to reply to our concerns,” Vestager said.

In response to the charges, Microsoft President Brad Smith said, “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.”

Microsoft had previously made concessions in April, aiming to avert regulatory action by proposing to unbundle Teams from other software like Office beyond Europe. However, EU officials deemed these measures insufficient to ensure fair competition.

Facing the possibility of hefty fines reaching 10 per cent of its global revenue, Microsoft seeks an amicable settlement with the EU.

Brad Smith, Microsoft’s president, emphasised their willingness to “work to find solutions” addressing the EU’s concerns.

EU lawmakers opened a Microsoft antitrust investigation into Teams bundling last year, following an anti-competitive complaint filed by Slack. Slack’s complaint alleged that Microsoft had “illegally tied” its Microsoft Teams product to Office and was “force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers.”

These charges come amid heightened scrutiny of Microsoft’s business practices. Regulators are examining the company’s partnership with OpenAI and its cloud computing licencing agreements, which some competitors see as unfair, including regulatory battles over its $75 billion acquisition of Activision Blizzard.

Additionally, the EU just recently charged Apple with stifling competition on its App Store.

The outcome of the EU’s investigation remains to be seen. Microsoft has the opportunity to respond to the charges, potentially leading to a settlement, formal charges, or even fines.

This move against Microsoft comes amid broader EU efforts to regulate Big Tech. Just a day prior, the Commission accused Apple of stifling competition on its App Store, the first such charges under new digital rules.

As the probe continues, the tech world watches closely to see how Microsoft will navigate these significant regulatory challenges.

Subscribe to Notifications