Published: Jul 27, 2023
The European Commission (EC) has launched a formal probe into Microsoft’s bundling of the Teams app with Office 365 and Microsoft 365. The EU regulators plan to conduct an in-depth investigation into whether Microsoft violated the EU’s competition rules “as a matter of priority.”
Microsoft’s rival Slack lodged a complaint with the European Commission back in 2020. The company alleged that the way Microsoft Teams is bundled with other Office products gives Microsoft an unfair advantage against the competition. Slack also said that Microsoft was forcing millions of customers to install Teams, blocking its removal, and hiding the true cost from organizations.
Back in April, Microsoft agreed to unbundle Microsoft Teams and the Office suite to avoid an EU antitrust investigation. The company is reportedly planning to charge different prices for its Office productivity suite with or without Teams. However, the implementation mechanism remains unclear.
Additionally, Microsoft has recently decided to kill off the built-in Chat experience in Windows 11. The Chat app is powered by Microsoft Teams, and it’s currently only available for consumers.
In this new case, the EU regulators will investigate whether Microsoft is leveraging its market power to eliminate the competition. If the allegations are true, the company could face a fine of up to 10 percent of its global annual turnover.
“The Commission is concerned that Microsoft may grant Teams a distribution advantage by not giving customers the choice on whether or not to include access to that product when they subscribe to their productivity suites and may have limited the interoperability between its productivity suites and competing offerings,” said Margrethe Vestager, Executive Vice President in charge of competition policy at the European Commission.
In a statement shared with CNBC, Microsoft said it would take necessary steps to address concerns from the European Commission. “We respect the European Commission’s work on this case and take our own responsibilities very seriously. We will continue to cooperate with the Commission and remain committed to finding solutions that will address its concerns,” a Microsoft spokesperson said.
The European Commission had previously received several complaints regarding Microsoft’s policies and licensing behaviors. Last week, German rival alfaview filed a complaint to the EC about Microsoft Teams and its integration into the Office productivity suite. Microsoft Azure recently faced an informal probe amid concerns that Microsoft is using its market dominance to lockout rivals.