A PYMNTS Company

Microsoft Faces Antitrust Probe in EU over Bundling Teams

 |  July 27, 2023

European tech giant Microsoft finds itself yet again in the crosshairs of the European Commission, which opened a formal antitrust investigation into the company’s tying of its Teams software with its Office productivity suite.

The competition enforcer is now carrying out an in-depth investigation into whether Microsoft may have breached EU competition rules by tying or bundling Microsoft Teams to its Office 365 and Microsoft 365 productivity suites, per CNBC. The inquiry follows a complaint from workspace messaging app company Slack in 2020 and the U.S. tech giant’s subsequent declining to offer bigger price cuts on its Office suite.

“We must ensure that the markets for these products remain competitive, and companies are free to choose the products that best meet their needs,” said EU antitrust chief Margrethe Vestager in a statement on the issue. “This is why we are investigating whether Microsoft’s tying of its productivity suites with Teams may be in breach of EU competition rules.”

Slack had originally raised concerns that Microsoft had ‘illegally tied’ its Microsoft Teams product to Office, and that the company was ‘force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers’. Microsoft offering concessions to the EU to stop bundling Teams with Office prompted regulators to investigate.

Read more: Germany’s Alfaview Files EU Antitrust Complaint Against Microsoft

Should Microsoft be found to be in breach of EU competition rules, it could face a fine of up to 10% of its total global annual turnover. This is far from the first time that the European Commission has investigated Microsoft over antitrust issues; in 2009, the EU raised concerns that competition was distorted by Microsoft tying Internet Explorer to its Windows operating system. More recently, the European Commission has reviewed the proposed $69 billion acquisition of Activision Blizzard and other deals on competitiveness grounds, both of which were finally approved in May after Microsoft offered remedies to address EU concerns.

Responding to the inquiry, a Microsoft spokesperson declared that the company would “continue to cooperate with the European Commission” and remained “committed to finding solutions to address the Commission’s concerns”.

The European Commission’s intent to open an antitrust investigation has raised concerns among regulator’s and rivals alike, especially as remote communication and collaboration tools like Teams are becoming indispensable for many businesses. Questions remain as to the level of true competition in the European communication and collaboration products market, and if Microsoft’s tying or bundling of Teams with its Office products is actually preventing rival companies from competing fairly in the market.

Time will presumably tell whether Microsoft is ultimately found to have broken EU competition rules, with the future of competition in the collaboration market – as well as the company’s bottom line – hanging in the balance.

Source: CNBC