Key Points:
- The European Commission has accused Microsoft of illegally bundling its Teams app with Office 365, which could result in significant fines.
- The charges stem from a 2020 complaint by Slack, a competitor owned by Salesforce.
- The Commission stated that bundling teams with offices provided an unfair advantage and hindered competitors.
- Microsoft previously paid 2.2 billion euros in EU antitrust fines for similar issues.
Microsoft is facing a significant antitrust fine from the European Commission, which accused the company on Tuesday of illegally integrating its Teams chat and video app with its Office suite. This action comes two decades after Microsoft’s last EU antitrust fine and follows a 2020 complaint from Slack, a workspace messaging app owned by Salesforce.
The European Commission, the EU’s competition watchdog, stated that Microsoft’s bundling of Teams with Office 365 gave the app an unfair distribution advantage. Furthermore, the Commission highlighted that restrictions on Teams’ interoperability with competitors’ products hindered fair competition in the market for remote communication and collaboration tools. EU antitrust chief Margrethe Vestager emphasized preserving competition in this sector to foster innovation.
In response to similar issues, Microsoft had to pay 2.2 billion euros ($2.4 billion) in EU antitrust fines for tying multiple products together. If the company is found guilty of the alleged antitrust breaches, the current charges could lead to a fine of up to 10% of its global annual turnover.
The Commission noted that the steps Microsoft had taken so far were insufficient to address its concerns and that further changes were necessary to restore competitive balance. Microsoft President Brad Smith reiterated the company’s willingness to resolve the issue, stating, “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.”
Salesforce President and Chief Legal Officer Sabastian Niles called for the Commission to implement a swift, binding, and effective remedy to restore free and fair choice in the market. Alfaview, a German rival and complainant, welcomed the Commission’s charges against Microsoft.
Teams were added to Office 365 in 2017 at no additional cost, eventually replacing Skype for Business. Its popularity surged during the pandemic, partly due to its video conferencing capabilities. However, competitors argued that bundling Teams with Office 365 gave Microsoft an unfair market advantage.
In April, Microsoft attempted to address EU antitrust concerns by separating Teams from Office globally and making it easier for competitors to integrate with its products. Despite these efforts, sources indicated that the unbundling might not be enough to satisfy regulators.
