Get your popcorn ready because Microsoft is back in trouble with the EU over “insufficient” changes to the way it packages Teams

The eternal battle between Microsoft and the European Commission has gained a new page in the annals, as the Commission not only believes that the software giant has breached EU antitrust law, but also believes that changes to the way Microsoft distributes Teams are “insufficient to address its concerns” and that “further changes to (its) conduct are necessary to restore competition.”

This is according to a recent statement by the European Commission (EC) presenting its preliminary findings from an antitrust investigation into Microsoft and its Teams cloud-based communications application. It all started when Slack Technologies (now owned by Salesforce) filed a complaint with the European Commission in 2020 alleging that Microsoft had illegally bundled Teams with its productivity software suites.

Three years later, the EC initiated an investigation to determine whether Microsoft had violated Art. 102 of the Treaty on the Functioning of the European Union, which is essentially a law prohibiting companies from abusing their dominant position on the EU market. At around the same time, a similar complaint was made by Alphaview (developer of videoconferencing software), and the EC decided to adapt its investigation to cover both allegations.

In its statement, the Commission writes that Microsoft “restricts competition in the market for communications and collaboration products” and that the changes Microsoft made when the EC began its investigation “are insufficient to address its concerns and that further changes to Microsoft’s behavior are necessary to restore competition.”

The changes in question were fairly straightforward: Microsoft stopped including Teams with its Microsoft 365 and Office 365 subscriptions for Switzerland and European Economic Area (EEA) countries. It also adjusted its software to allow companies like Zoom and Slack to build integrated solutions for products like Exchange, Outlook, and, of course, Teams.

However, the European Commission remains concerned that “Microsoft may have provided Teams with a distribution advantage by not giving customers a choice as to whether they want to access Teams as part of the subscription to their SaaS productivity applications” and that “the conduct may have prevented Teams from competing with therefore, introducing innovations to the detriment of customers in the European Economic Area.”

If the EC’s concerns are confirmed during the investigation, after Microsoft has defended itself against its actions, the EC could impose a fine of up to 10% of the company’s annual global turnover. In 2023, Microsoft’s total revenues amounted to just over $210 billion, so the fine would be the largest ever imposed in the history of the company in the European Commission, almost 10 times.

Even for a company with the largest market capitalization in the world, twenty-something billion dollars is not a small amount of money. Not that this news worried investors, as Microsoft’s stock prices showed no signs of declining in value. I have no doubt that he will challenge the Commission’s findings, but whether he will simply pay the fine or make Teams a completely separate package, no one knows now.

In the meantime, I’ll eat some popcorn and see what happens. Popcorn is a healthy snack, did you know that? Tasty. It’s certainly a lot nicer to eat than a specific cloud-based communication and collaboration tool.