Microsoft allegedly violated European Union antitrust rules by bundling its Teams software with apps such as Office 365 and Microsoft 365 — behavior that the regulatory body said was “possibly abusive.”
The European Commission said Monday it informed Microsoft of its preliminary view that the US tech giant has been “restricting competition” by bundling Teams with its core office productivity applications.
On Monday, the commission took aim at another American tech behemoth — Apple. It accused the iPhone maker of preventing other app developers from offering their customers cheaper options outside of its App Store in violation of rules designed to encourage competition.
The Justice Department filed a sweeping antitrust lawsuit against Apple this year, accusing it of illegally monopolizing the smartphone market and boxing out competitors, stifling innovation and keeping prices artificially high.
The European Commission, which is charged with enforcing the EU’s antitrust laws, alleges that Microsoft gave Teams a “distribution advantage” by not giving customers a choice on whether to have Teams when they purchased the software.
Microsoft also stood accused of limiting rival messaging apps’ ability to work with the company’s own software.
“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,” Margrethe Vestager, the commission’s executive vice-president for competition policy, said in a statement.
“And preserving competition for remote communication and collaboration tools is essential as it also fosters innovation on these markets.”
Last year, Microsoft began marketing Office 365 and Microsoft 365 to European customers without Teams in an effort to head off an antitrust clash with the EU. The company then extended the same offer to its global customer base.
The two software suites include programs like Word, Excel and Outlook.
But the commission said on Tuesday that the changes were inadequate and that the Windows maker needs to do more to “restore competition.”
“Having unbundled Teams and taken initial interoperability steps, we appreciate the additional clarity provided today and will work to find solutions to address the Commission‘s remaining concerns,” Microsoft President Brad Smith said in a prepared statement provided to The Post.
Microsoft faces a fine worth up to 10% of its annual global revenue. In the 12 months ending March 31, Microsoft generated nearly $212 billion in revenue globally.
The EU could also force Microsoft to enact “remedies” that would bring it into compliance with antitrust laws.
In July of last year, Slack Technologies filed a complaint against Microsoft with European authorities. A subsequent complaint against Microsoft was initiated by video-conferencing software maker Alfaview.
Slack, a subsidiary of business software maker Salesforce, alleged that Microsoft abused its market dominance to stifle competition by illegally bundling Teams with its Office suite.
“The Statement of Objections issued today by the European Commission is a win for customer choice and an affirmation that Microsoft’s practices with Teams have harmed competition,” said Sabastian Niles, president & chief legal officer at Salesforce.
“We appreciate the Commission’s thorough investigation of Slack’s complaint and urge the Commission to move towards a swift, binding, and effective remedy that restores free and fair choice and promotes competition, interoperability, and innovation in the digital ecosystem.”
With Post wires
