EU charges Microsoft over possibly abusive tying practices regarding Teams

SAN FRANCISCO — The European Union (EU) on Tuesday accused Microsoft of breaching antitrust rules with the ‘abusive’ bundling of its Teams and Office products.

“The European Commission has informed Microsoft of its preliminary view that Microsoft has breached EU antitrust rules by tying its communication and collaboration product Teams to its popular productivity applications included in its suites for businesses Office 365 and Microsoft 365,” the commission said in a Statement of Objections.

The commission mentioned that it is concerned that, since at least April 2019, Microsoft has been tying Teams with its core SaaS productivity applications, thereby restricting competition on the market for “communication and collaboration products and defending its market position in productivity software and its suites-centric model from competing suppliers of individual software.”

The EU began an antitrust investigation of Microsoft’s inclusion of Teams nearly a year ago, in July 2023 — two years after a complaint from Teams competitor Slack.

Following this investigation, Microsoft announced in late August last year that it would partially unbundle Teams. However, when announcing the results of its initial inquiry on Tuesday, the European Commission stated that it believes the changes made by Microsoft to distribute Teams last year were not sufficient to address its concerns.

The tech giant is being urged to take further action.

“We are concerned that Microsoft may be giving its own communication product Teams an undue advantage over competitors by tying it to its popular productivity suites for businesses,” said Margrethe Vestager, Executive VP in charge of competition policy.

“If confirmed, Microsoft’s conduct would be illegal under our competition rules. Microsoft now has the opportunity to reply to our concerns,” she added.

A formal finding of a breach of EU competition rules could lead to Microsoft being fined up to 10 per cent of its annual worldwide turnover. The bloc could also impose remedies if it determines that steps are necessary to restore competition.