The European Union accused Microsoft on Tuesday of violating competition rules. In a formal statement of objections, the bloc said it suspects the software giant of abusing antitrust rules by bundling its real-time communications and collaboration tool Teams with popular productivity apps, including cloud-based business suites Office 365 and Microsoft 365.
The EU opened an antitrust investigation into Microsoft’s bundling of Teams just under a year ago, in July 2023 – two years after a complaint from Teams rival Slack.
Microsoft followed the investigation by announcing a partial unbundling of Teams in late August last year (which it ultimately implemented in April 2024). However, in announcing the results of its preliminary investigation on Tuesday, the European Commission said it suspects that the changes Microsoft made to Teams distribution were insufficient to address its concerns and that the tech giant must go further.
“The Commission is concerned that Microsoft has engaged in tying since April 2019 Teams with its core SaaS productivity applications, limiting competition in the communications and collaboration products market and defending its market position in this area productivity software and the suite-oriented model of competing individual software providers,” the Commission wrote in a press release.
The EU suspects that the bundling of Microsoft Teams has provided a “distribution advantage” over competing products such as Slack. The Commission’s preliminary view is also that this may have been further exacerbated by interoperability limitations between Teams’ competitors and Microsoft’s offering. “The behavior may have hindered Teams‘ deter rivals from competing and in turn innovating, at the expense of customers in the European Economic Area,” it added.
It’s not just chat-based apps like Slack that could be affected. As we noted earlier this year, video conferencing companies like Zoom may also have been influenced over the years by the way Microsoft has bundled Teams – an all-in-one product that combines messaging, voice and video calling and conferencing offers to users. Since Slack filed its complaint, the EU notes, it has received another complaint from German company Alfaview GmbH, a videoconferencing provider.
A formal finding of a breach of EU competition rules could lead to Microsoft being fined up to 10% of its annual global turnover. The bloc could also impose remedies if it decides steps are needed to restore competition.
Microsoft has been contacted for comment.
The statement of objections opens a new phase in the investigation, in which Microsoft will be invited to respond to the EU’s preliminary findings, so the final outcome cannot be predicted. There is also no set timetable for EU enforcers to complete their investigations.
The Commission’s press release notes that it has received a second complaint regarding Teams, filed by a German company called Alfaview GmbH, which it said raised “similar concerns regarding the distribution of Teams.” The procedure that the company has now opened against Microsoft will address both the complaints from Slack and alfaview.
Sabastian Niles, president and chief legal officer of Salesforce – the CRM giant that acquired Slack at the end of 2020 – responded to the development in a statement: “Today’s statement of objections issued by the European Commission is a victory for the choice of customer. and confirmation that Microsoft’s practices with Teams have harmed competition. We appreciate the Commission’s thorough investigation into Slack’s complaint and urge the Commission to take steps toward a swift, binding and effective solution that restores free and fair choice and promotes competition, interoperability and innovation in the digital ecosystem.”
This report has been updated with comments from Slack