Microsoft faces EU antitrust scrutiny over Teams and Office

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The European Union has scrutinized global software king Microsoft, alleging antitrust violations resulting from what it said was an “abusive” bundling practice.

This regulatory storm is focused on the seamless integration of Microsoft’s communication and collaboration tool, Teams, with its popular productivity apps found in Office 365 and Microsoft 365.

In a strong statement of opposition, the European Commission — the EU’s executive arm — said Microsoft’s actions violated EU antitrust rules.

The crux lies in Teams’ tie-in to the Office 365 and Microsoft 365 framework, a move considered harmful to fair competition.

If the Commission’s preliminary view becomes a formal finding, the consequences for Microsoft could be serious. The company could face a ban on such practices and a financial penalty of up to ten percent of its global revenues.

Microsoft, anticipating a regulatory storm, actively separated Teams from Microsoft 365.

However, the Commission remains unchanged, calling these changes “insufficient” to address its concerns.

Microsoft vice president and president Brad Smith expressed hope that Vole would be able to address additional concerns.

The story goes back to July 2023, when the EU launched an investigation into Microsoft in response to a complaint filed by Salesforce-owned Slack, a powerful rival to Teams in the chat services arena.

The Commission’s scrutiny focuses on Microsoft’s strategic maneuvering. Starting around 2019, the tech giant combined Teams with its software-as-a-service (SaaS) applications, including the ubiquitous Office suite.

The concern is about asymmetry of choice: customers subscribing to SaaS productivity apps have unknowingly purchased Teams. This and the interoperability limitations of Teams competitors could have stifled innovation and put European customers at a disadvantage.