New Delhi: The European Union accused Microsoft of violating competition regulations on Tuesday. The bloc issued a formal statement of objections, alleging that the tech giant has breached antitrust rules by bundling its communication and collaboration tool, Teams, with popular productivity applications such as Office 365 and Microsoft 365.
The EU initiated an antitrust investigation into Microsoft’s bundling practices nearly a year ago, in July 2023, following a complaint from Slack, a competitor of Teams. In response to the scrutiny, Microsoft announced a partial unbundling of Teams in late August last year, which was finally implemented in April 2024. However, the European Commission, in its preliminary investigation results released on Tuesday, indicated that Microsoft’s changes to Teams’ distribution were inadequate and that further action is necessary.
The Commission expressed concerns that since at least April 2019, Microsoft has been tying Teams with its core Software as a Service (SaaS) productivity applications, thereby stifling competition in the market for communication and collaboration tools and protecting its dominance in productivity software. This practice may have given Teams an unfair “distribution advantage” over competing products like Slack, and interoperability limitations between Teams and rival offerings may have further hindered competition, innovation, and customer benefits within the European Economic Area.
The investigation is not limited to chat-based applications like Slack; video conferencing companies such as Zoom might also be affected by Microsoft’s bundling of Teams. Following Slack’s complaint, the EU received another complaint from German videoconferencing provider alfaview GmbH, citing similar issues.
Should the EU formally determine that Microsoft has breached competition rules, the company could face fines of up to 10% of its annual global turnover. The bloc might also enforce measures to restore competitive balance. With the issuance of the statement of objections, Microsoft now has the opportunity to respond to the EU’s preliminary findings. The investigation’s final outcome remains uncertain, and there is no such timeline for its completion made yet.
