EU Opens Antitrust Investigation into Microsoft’s Bundling of Teams with Office Products
Introduction
European Union regulators have initiated an antitrust investigation into Microsoft’s inclusion of its video and chat app, Teams, with other Office products. The European Commission suspects this bundling practice may constitute anti-competitive behavior.
Background
This investigation marks the first antitrust probe by the EU into Microsoft in over ten years. The Commission expressed concerns that Microsoft is granting Teams a distribution advantage by not providing customers with the choice to exclude the app when subscribing to its productivity suites. Additionally, the interoperability between Microsoft’s productivity suites and competing offerings may have been limited.
Implications
In simpler terms, the EU is worried that Microsoft is forcing customers to purchase Teams when they subscribe to Office 365. This strategy could hinder competition in the workplace messaging and video app market.
The Commission added that these practices may be considered anti-competitive tying or bundling, preventing other communication and collaboration tools suppliers from competing.
Microsoft 365, previously known as Office 365, includes various workplace-focused applications like Word and Excel.
Consequences
Antitrust investigations do not have a predetermined completion deadline. If Microsoft is found to have violated EU competition rules, the tech giant may face fines of up to 10% of its total global annual turnover.
Slack’s Concerns
In 2020, Teams’ rival, Slack, raised concerns about Microsoft’s competitiveness. Slack filed a complaint with the EU, alleging that the tech giant unlawfully tied Teams to its dominant productivity packages, such as Microsoft 365. The complaint stated that millions of users were compelled to install Teams without the option to uninstall it. Salesforce, the owner of Slack, supports these allegations.
Microsoft’s Response
A Microsoft spokesperson stated that the company respects the European Commission’s investigation and takes its responsibilities seriously. Microsoft commits to cooperating with the Commission to address its concerns and find appropriate solutions.
Past Antitrust Investigations Involving Microsoft
The last EU antitrust probe targeting Microsoft occurred in 2009, concerning the tie between its web browser, Internet Explorer, and the Windows operating system. Microsoft offered remedies to the EU, ensuring Windows users could choose alternative web browsers.
In a more recent case, the EU scrutinized Microsoft’s proposed $69 billion acquisition of Activision Blizzard, citing potential competition distortions in the console and cloud gaming market. Following Microsoft’s proposed remedies, the deal gained approval from regulators in May.
