Europe slaps Microsoft with antitrust case for bundling Teams

Microsoft has breached EU antitrust rules by bundling its messaging app Teams with other office and productivity applications, according to a preliminary verdict of the European Commission.

Microsoft risks a fine of up to 10% of its annual worldwide revenues of $236.6 billion, meaning the maximum fine could reach as high as 23.7 billion.

Microsoft has been tying Teams, a cloud-based communication and collaboration tool, with its “core software as a service” productivity applications since at least April 2019.

The European Commission (EC) believes this practice restricts competition in the market for similar products.

“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. And preserving competition for remote communication and collaboration tools is essential as it also fosters innovation in these markets,” said Margrethe Vestager, Executive Vice-President in charge of competition policy.

The EC also believes that customers were not given a choice whether or not they wanted to acquire access to teams when they subscribed to Microsoft’s services.

If confirmed, Microsoft’s conduct would be illegal under Europe’s competition rules.

The official document does not prejudge the outcome of an investigation, and now, Microsoft has the opportunity to respond to EC’s concerns and request an oral hearing.

European officials also noted that Microsoft changed how it distributes Teams after the EC opened proceedings in July 2023. Microsoft started offering suites without Teams; however, according to the EC, that is insufficient to restore competition.

The ongoing investigation was opened following a complaint by Slack Technologies, another collaboration tool now owned by Salesforce. Another complaint was later filed by Alfaview GmbH, which provides video conferencing tools.

The sending of a Statement of Objections does not prejudge the outcome of an investigation.

This is the second biggest European case against American big tech companies this week. EU antitrust regulators have charged Apple with breaching the bloc’s tech rules for alleged failure to comply with the Digital Markets Act (DMA).

In a statement to CNN, Microsoft President Brad Smith said the company appreciates the additional clarity provided by the EC and will work to find solutions to address remaining concerns.