Microsoft, antitrust investigation in Europe for unfair competition by Teams

For the first time in fifteen years, Microsoft is once again at the center of an antitrust investigation by the European Union. This time, the tech giant is accused of illegally integrating its Teams chat application into Office 365 and Microsoft 365 subscription packages, creating an unfair competitive advantage. The European Commission said it had notified Microsoft of a breach of EU antitrust rules. “The European Commission has informed Microsoft of its preliminary opinion that Microsoft has violated EU antitrust rules by tying its Teams communication and collaboration product to its productivity applications included in the Office 365 and Microsoft 365 business suites,” the Commission’s statement read.

Margrethe Vestager, head of competition policy in Europe, expressed concern that Microsoft could give its Teams product an advantage over competitors by tying it to its popular productivity suites. “If confirmed, Microsoft’s behavior would be illegal under our competition rules. Microsoft now has the opportunity to address our concerns,” Vestager said. In response, Microsoft separated Teams from Office in Europe last year and later made Teams a standalone application globally. However, these measures were not enough to avoid the charges. Brad Smith, Microsoft’s chairman, told the Financial Times: “Having separated Teams and taken the first steps towards interoperability, we appreciate the additional clarity provided today and will work to find solutions to address the Commission’s remaining concerns.”

The antitrust investigation was launched following an unfair competition complaint filed by Slack in July 2020. Slack had accused Microsoft of “tying” its Microsoft Teams product to Office, “forcibly installing it for millions of users, preventing its removal and hiding the true cost from corporate customers.” If Microsoft is found guilty of antitrust violations, it could face a fine of up to 10% of the company’s annual global revenue. The European Commission could also impose remedies to force Microsoft to modify its software products, as it has done in the past.

In 2004, the European Commission had ordered Microsoft to offer a version of Windows without Media Player, leading to the creation of Windows XP N available only in EU markets. In 2009, Microsoft was forced to implement a browser choice screen in its Windows operating system to give users the ability to choose between different web browsers, after years of Internet Explorer shipping with Windows. In 2013, Microsoft was fined $730 million for failing to include the browser choice screen in Windows 7 SP1.