The European Union (EU) has launched an antitrust investigation into Microsoft’s practice of bundling its collaboration and communication software, Teams, with its popular cloud-based productivity suites for businesses, Office 365 and Microsoft 365.
This investigation was prompted by a complaint from rival company Slack, which alleged that Microsoft’s bundling of Teams with its productivity suites unfairly restricted competition in the European Economic Area (EEA) for communication and collaboration products.
The European Commission expressed concern that Microsoft may be abusing its market position in productivity software by limiting competition in the EEA for communication and collaboration products. It specifically pointed out that Microsoft might be giving Teams a distribution advantage by not allowing customers to choose whether or not to include access to the product when subscribing to their productivity suites. Additionally, the Commission raised concerns about limited interoperability between Microsoft’s productivity suites and competing offerings.
In response to the investigation, Microsoft acknowledged the European Commission’s action and stated its commitment to cooperating with the probe. The company emphasized its dedication to finding solutions that address the Commission’s concerns.
The dispute between Slack and Microsoft dates back to July 2020 when Slack accused Microsoft of illegally tying Teams to its dominant Office productivity suite. Slack alleged that Microsoft had forcibly installed Teams for millions of users, making it difficult to remove and obscuring its true cost to enterprise customers. Microsoft, on the other hand, defended itself by pointing to the increased demand for video conferencing and digital communication tools during the COVID-19 pandemic, leading to a surge in Teams’ adoption.
The EU’s approach to regulating digital giants is evolving, with the introduction of the Digital Markets Act (DMA) providing additional antitrust enforcement powers. The DMA targets powerful digital intermediaries or “gatekeepers” and imposes upfront obligations and restrictions on their core platform services to prevent self-favoring practices like bundling or tying.
Given Microsoft’s business scope, the regulation under the DMA could apply to areas relevant to Slack’s complaint, such as communications and cloud services. The investigation highlights the ongoing efforts by the EU to ensure fair competition and protect consumer interests in the digital marketplace.
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