EC to include Teams as part of antitrust charges despite Microsoft concessions

The European Commission (EC) plans to bring antitrust charges against Microsoft for anticompetitive practices regarding its Teams product despite concessions the company has made so far to try to avoid them.

EU officials plan to include concerns over Microsoft’s workforce collaboration and teleconferencing app in the forthcoming antitrust charges against the technology giant, according to a report in the Financial Times published Monday.

Last July, the EC opened a formal investigation to assess whether Microsoft may have breached EU competition rules by tying or bundling its communication and collaboration product Teams to its popular suites for businesses Office 365 and Microsoft 365.

The EC declined to comment on the FT report Monday, but a spokesperson noted that its investigation into Microsoft’s potential unfair competitive practices over Teams is ongoing. Microsoft has made several concessions to try to avoid antitrust charges that are expected to come from the EC, apparently to no avail.

Conscious unbundling

Last month, the company revealed that its enormously popular workforce collaboration app — which reached over 300 million global users in 2023 — will now be sold separately from Microsoft Office worldwide. This extended the previous action to unbundle Teams from its productivity bundle in the EU Economic Area and Switzerland.

However, it appears this was not enough to appease EU officials into thinking this made the market fair for competition, which means the company still faces being fined up to 10% of its global turnover if found in breach of EU rules. Microsoft Monday declined to comment on the FT report.

The origin of the EC Microsoft Teams investigation dates back to July 2020 when enterprise messaging application Slack, which has since been bought by Salesforce, originally filed a competition complaint against Microsoft.

That complaint alleged that the tech giant was engaging in the “illegal and anti-competitive practice of abusing its market dominance to extinguish competition in breach of European Union competition law” by “force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers.”

This was around the same time apps such as Slack and Teams, which allow corporate workers in disparate locations to collaborate and share files via chat, exploded in popularity during the remote work mandates of the COVID-19 pandemic.

Industry continues to have questions

Apparently, despite Microsoft’s unbundling, rivals still have concerns that the company will make Teams run more seamlessly on its own software than theirs, according to the FT report. They also have concerns over data portability that could hinder existing Teams users from making the switch to rival apps, according to the report.

Indeed, questions remain for an industry that watches with keen interest whether Microsoft is sincere in “following the fairness principle in both letter and spirit,” noted Pareekh Jain, CEO of EIIRTrend & Pareekh Consulting.

“Apart from price bundling concerns,” the question also remains whether Microsoft is “facilitating users to freely transfer between videoconferencing apps with the right experience and performance,” he said.

“This case is important as it also will have an impact on bundling and unbundling of copilots and OpenAI-related software apps,” Jain added.

If and when the charges are filed, it would be the first time in about a decade that EU regulators have formally filed antitrust charges against Microsoft. The last series of anticompetitive investigations ended in 2013. To date, Microsoft has racked up 2.2 billion euros ($2.4 billion) in fines in the past decade for tying or bundling products together in a way that was deemed anticompetitive by EU regulators.