Microsoft has breached EU antitrust laws by using ‘potentially abusive’ practices in selling its Teams messaging and video conferencing application alongside the frequently used business applications.
The European Commission stated on Monday that it recently advised Microsoft on its initial plan of investigation that revealed that the US software company “restricted competition” since it linked Teams with core workplace communication programs like Office 365 and Microsoft 365.
The commission, the 27-nation bloc’s top antitrust enforcer, said it doubts if Microsoft has not offered clients an option to obtain Teams as part of a package where they could be deprived of the app due to the software. Microsoft relatively might have done it by constraining the compatibility of rival messages app with its software, it said.
“It is hugely important to Microsoft but small competitors cannot get the same benefit and it may well cement Teams as the key means of business communication,” said Margrethe Vestager, the commission’s executive vice-president for competition policy.
“As with other markets, competition should also be maintained for remote communication and collaboration tools since it contributes to the development of these markets, ” he added.
Last year, Microsoft proposed some adjustments to avoid a penalty: it began offering the software packages to European clients without teams. However, the commission said on Tuesday that the changes are insufficient and it said that is not enough and needs to do more in order to “restore competition”.
Edging on rivalry of Teams with Zoom and others averse to sharing their customer data, Microsoft had unbundled Teams and taken initial interoperability steps. “We appreciate the additional clarity the Commission provided today and are committed to finding ways to address the Commission’s remaining concerns,” Microsoft President Brad Smith said in a prepared statement.
The same month, the firm also granted clients globally the ability not to include Microsoft Teams in their Microsoft 365 and Office 365 subscriptions. Some of the software suites are; Word, Excel, and Outlook among others.
This is where Microsoft has an opportunity to Answer accusations, officially referred to as the statement of objections, before the final decision of the commission. This might attract a fine equivalent to 10 percent of the company’s annual revenues for that country or be compelled to conduct “remedies,” in a bid to address competition issues.
At the instance of the rival Slack Technologies, which produces popular workplace messaging software, the commission began investigating in July 2023. The second complained was filed by a second company, Alfaview that deals in videoconferencing software.
Messaging platform competitor, Slack, which is owned by Salesforce – a business software company, accused Microsoft of using its dominance to supress its rivals – a violation of EU law as per its alleged anticompetitive bundling of Teams with Office which includes Word, Excel, and Outlook.
”Today, the Statement of Objections presented it by the European Commission is a victory of consumer preferences and recognition of Microsoft’s wrongdoing in distorting competition through Teams,” Salesforce president & Chief Legal Officer Sabastian Niles said. Slack values the Commission’s investigation of the matter and requests the Commission to proceed to a speedy, definitive, and efficient redressment that guarantees free and competitive choices and fosters competition, compatibility, and innovation in the digital environment.