EU launches Microsoft inquiry over Teams app

Updated on: November 15, 2023 12:53 PM

Damien Black
Senior Journalist

The European Commission (EC) has launched an inquiry against Microsoft, which it accuses of bundling its Teams application with popular suites such as Office 365 in violation of EU fair competition rules.

The reasoning goes that by essentially offering the app, which can be used for messaging, calling, video conferences, and file sharing, free to those who purchase Office 365 or Microsoft 365, the tech giant is not giving competitors a chance to get into the market.

“Microsoft includes Teams in its well-entrenched cloud-based productivity suites for business customers Office 365 and Microsoft 365,” said the EC. “The Commission is concerned that Microsoft may be abusing and defending its market position in productivity software by restricting competition in the European Economic Area (EEA) for communication and collaboration products.”

Its central concern is that by not giving Microsoft customers a chance to opt out of installing Teams along with other software they have bought from the corporation, the comms app will essentially receive a “distribution advantage.”

This in turn “may constitute anti-competitive tying or bundling and prevent suppliers of other communication and collaboration tools from competing, to the detriment of customers in the EEA.”

The EC also suspects that Microsoft “may have limited the interoperability between its productivity suites and competing offerings.”

It says that if its suspicions are proven true, Microsoft will be found in breach of Article 102 of the Treaty on the Functioning of the European Union. In this case it could face a fine of up to one-tenth of its annual revenue.

The EC added that it had informed the tech giant and member states’ competition authorities of the proceedings, which have no legal deadline — meaning that, in theory, the investigation could play out for quite some time.

“The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the companies concerned cooperate with the Commission, and the exercise of the rights of defence,” it said.

Responding to the statement, Microsoft said it would cooperate with the EC investigation.