Microsoft Faces EU Antitrust Charges for Bundling Teams with Office 365

Key Takeaways:

• The European Commission has accused Microsoft of antitrust violations for bundling Microsoft Teams with its Office 365/Microsoft 365 subscriptions.
• Despite Microsoft’s concessions to decouple Teams from these subscriptions, the EC remains concerned that these actions are insufficient to restore fair competition.
• If found guilty of breaching EU competition law, Microsoft could face a fine of up to 10 percent of its global annual turnover.

The European Commission has issued new antitrust charges against Microsoft concerning the bundling of Microsoft Teams with Office 365/Microsoft 365 commercial subscriptions. This move follows the EC’s preliminary findings from an antitrust investigation that started back in July 2023.

“In particular, the Commission is concerned that Microsoft may have granted Teams a distribution advantage by not giving customers the choice whether or not to acquire access to Teams when they subscribe to their SaaS productivity applications,” the EU Commission explained. “This advantage may have been further exacerbated by interoperability limitations between Teams’ competitors and Microsoft’s offerings. The conduct may have prevented Teams’ rivals from competing, and in turn innovating, to the detriment of customers in the European Economic Area.”

The Intensifying Battle for Workplace Dominance: Microsoft Teams vs Slack

Back in 2020, Slack filed a formal antitrust complaint against Microsoft with the European Commission. Slack argued that Microsoft was misusing its market dominance by illegally bundling its Teams collaboration tool with its Office suite, making it impossible to remove and obscuring the true costs for businesses.

Last year, Microsoft agreed to stop bundling Microsoft Teams with its Office 365 commercial plans in an effort to preempt an antitrust investigation in the EU. Back in April, Microsoft took further steps by extending this policy globally, allowing customers the choice to keep Teams as is, remove it from their license, or purchase Teams separately as a standalone application.

However, the European Commission is still concerned that Microsoft didn’t go far enough to facilitate fairness in the market. “The Commission preliminarily finds that these changes are insufficient to address its concerns and that more changes to Microsoft’s conduct are necessary to restore competition,” the EC said today.

EU’s antitrust probe into Microsoft Teams could result in a massive fine

Microsoft is now required to respond to the Statement of Objections and request an oral hearing. However, the company faces the possibility of a fine of up to 10 percent of its global annual turnover if found in violation of EU competition law.

In a statement to the Financial Times, Microsoft said that it’s working with the EC to come up with solutions. “Having unbundled Teams and taken initial interoperability steps, we appreciate the additional clarity provided today and will work to find solutions to address the Commission’s remaining concerns,” said Microsoft President Brad Smith.

Earlier this year, Microsoft announced that Teams has approximately 320 million monthly active users worldwide. In recent years, Microsoft Teams has gained significant popularity, integrating well with other Microsoft 365 applications. Additionally, Microsoft introduced a consumer version of Teams for Windows 11 PCs.