European Commission accuses Microsoft of monopoly over Teams merger with Office

JAKARTA – Microsoft is facing a hefty antitrust fine after the European Commission on Tuesday (June 25) accused the company of illegally bundling its Teams chat and video app with Office products, giving it an unfair advantage over rivals like Slack.

Two decades after the European Union’s last fine against Microsoft, the EU’s competition watchdog’s latest action was sparked by a 2020 complaint filed by Salesforce’s rival text messaging app Slack.

Reuters first reported in April that the EU was bracing for allegations. The European Commission, acting as the EU’s competition watchdog, found that Teams received temporary distribution benefits while restrictions preventing interactions between Teams competitors and Microsoft’s offerings made it harder for competitors to operate.

“Maintaining competition in remote communication and collaboration tools is very important because it also encourages innovation in this market,” EU antitrust chief Margrethe Vestager said in a statement.

Two decades ago, the US tech giant was ordered to pay an EU antitrust fine of 2.2 billion euros (38.6 trillion rupees) for bundling or combining two or more products and other offences. Microsoft could face a fine of 10% of its annual global turnover if it is found guilty of the latest antitrust violation.

The Commission found that Microsoft’s actions were insufficient to address its concerns and that further changes were necessary to restore competition.

The EU Commission wants companies to sell Office without Teams at a lower price than announced, while competitors want clearer rules on interoperability and more incentives for users to switch.

Microsoft CEO Brad Smith reiterated comments he made earlier this month about the company’s willingness to address the issue. “After separating the teams and taking the first step toward interoperability, we appreciate the additional clarity we received today and will work to find a solution that addresses the Commission’s remaining concerns,” Smith said.

Salesforce CEO and Chief Legal Officer Sabastian Niles called on the Commission to take action to find a quick, binding and effective solution that restores free and fair choice.

German competitor and complainant Alfaview also welcomed the Commission’s allegations against Microsoft. Teams was added to Office 365 for free in 2017, then replaced Skype for Business. It has seen a surge in popularity during the pandemic, partly due to videoconferencing, but its competitors said the product merger gave Microsoft an unfair advantage.

In April, Microsoft separated Teams from Office globally to address EU antitrust concerns and also make it easier for competitors to use its products. However, sources say the separation is unlikely to go down well with regulators.

Tag: Microsoft antitrust teams