Microsoft Breached Antitrust Rules By Bundling Teams With Office Software, European Union Says

LONDON — Microsoft violated European Union competition regulations by attaching its Teams messaging and videoconferencing service to its widely used business software, the bloc alleged.

On Monday, the European Commission told Microsoft that it believes the U.S. tech giant has been “restricting competition” by combining Teams with essential office productivity tools such as Office 365 and Microsoft 365.

The commission, the 27-nation bloc’s top antitrust enforcer, believes Microsoft may have given Teams a “distribution advantage” by not providing consumers the option to have Teams when they purchased the program. According to the report, limitations on competing messaging apps’ ability to work with Microsoft software may have exacerbated the advantage.

Microsoft | GMUK Image

Microsoft Breached Antitrust Rules By Bundling Teams With Office Software, European Union Says

“We are concerned that Microsoft may be giving its own communication product Teams an unfair advantage over competitors by linking it to its popular productivity suites for businesses,” Margrethe Vestager, the commission’s executive vice president for competition policy, said in a statement.

“And preserving competition for remote communication and collaboration tools is essential as it also fosters innovation on these markets.”

The commission targeted Microsoft a day after accusing Apple of violating the bloc’s new digital competition regulation in a flurry of regulatory action highlighting Brussels’ leading role as a watchdog for Big Tech giants.

Last year, Microsoft made certain modifications to avoid a penalty, including offering software packages without Teams to European clients. However, the commission stated on Tuesday that the modifications are insufficient to meet its concerns and that more action is required to “restore competition.”

Microsoft | Microsoft Image

Microsoft Breached Antitrust Rules By Bundling Teams With Office Software, European Union Says

“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.” Microsoft President Brad Smith issued a prepared statement.

In April, the business also offered consumers the option of purchasing Microsoft 365 and Office 365 without Teams. The two software suites comprise products like Word, Excel, and Outlook.

Microsoft now has the opportunity to react to the allegations, formally known as a statement of objections, before the commission reaches its final decision. The corporation may face a punishment of up to 10% of its annual global revenue or be obliged to implement “remedies” to address competition concerns.

The commission launched its inquiry in July 2023 after rival Slack Technologies, which creates popular office messaging software, submitted a complaint with Brussels. Alfaview, which produces videoconferencing software, also filed a separate complaint.

Microsoft

Microsoft Breached Antitrust Rules By Bundling Teams With Office Software, European Union Says

Slack, owned by Salesforce, claimed that Microsoft utilized its market dominance to limit competition, which breached EU legislation.

“The Statement of Objections issued today by the European Commission is a win for customer choice and an affirmation that Microsoft’s practices with Teams have harmed competition,” says Sabastian Niles, president of Salesforce. “We appreciate the Commission’s thorough investigation of Slack’s complaint and urge the Commission to move towards a swift, binding, and effective remedy that restores free and fair choice and promotes competition, interoperability, and innovation in the digital ecosystem.”

SOURCE – (AP)