Microsoft Corp. faces a European Union probe over concerns it’s driving out competition by unfairly bundling its Teams video conferencing app with its popular business software suite.
The European Commission said Thursday it opened the formal investigation to examine whether Microsoft may have breached EU competition rules by tying or bundling Teams to its Office 365 and Microsoft 365 packages.
The EU’s antitrust branch said Microsoft’s actions may have given Teams an advantage over rivals by not giving customers choice over viable alternatives and the company may have also limited operability with rival software platforms.
Demand for videoconferencing boomed after the coronavirus pandemic that consigned hundreds of millions of workers to their homes. But critics say Microsoft was able to leverage its power over PC software to make Teams the easiest option for remote workers already using programs like Word and Excel.
“We must therefore ensure that the markets for these products remain competitive, and companies are free to choose the products that best meet their needs.,” the EU competition commissioner Margrethe Vestager said in a statement.
The EU’s new probe comes three years after Salesforce Inc.’s messaging platform Slack made a complaint to the EU’s antitrust watchdog.
Slack was acquired by Salesforce, the leader in cloud-based customer management software, in a $27.7 billion deal in 2021. Like many of its peers, it’s been hit by a slowdown in tech spending after the pandemic — announcing plans to cut about ten per cent of headcount after staffing nearly tripled in the past four years.
Microsoft has spent years battling antitrust regulators in the US and Europe over complaints that it unfairly tied products and blocked rivals’ access to the desktop Windows software. But it’s not faced any formal EU market dominance scrutiny in a decade, since a 2013 fine for not complying with a pledge to offer a choice of web browsers.
“We respect the European Commission’s work on this case and take our own responsibilities very seriously,” a Microsoft spokesperson said. “We will continue to cooperate with the Commission and remain committed to finding solutions that will address its concerns.”
The Redmond, Washington-based company faces at least two more complaints with EU regulators, including one by a European cloud-company policy group with Amazon.com Inc.’s AWS among its members, that accuses Microsoft of using unfair licensing practices to lure EU customers to its cloud infrastructure.
NextCloud GmbH in 2021 filed another complaint against Microsoft over bundling its OneDrive cloud system with Windows, which is still pending.
EU regulators have since also started quizzing competitors and customers informally about Microsoft’s Azure cloud business.
Apart from attention into possible abuse of dominance cases, Microsoft also continues to face scrutiny over its record $69 billion deal for games developer Activision-Blizzard. The EU cleared the mega-deal earlier this year.
We have opened a formal investigation to assess whether Microsoft may have breached EU competition rules by tying or bundling its communication and collaboration product Teams to its popular suites for businesses Office 365 and Microsoft 365 ↓
— European Commission (@EU_Commission) July 27, 2023
