The European Union accused Microsoft of violating competition rules on Tuesday. In a formal statement of objections, the bloc said it suspected the software giant of abusing antitrust rules by bundling its real-time communication and collaboration tool, Teams, with popular productivity apps, including its Office 365 and Microsoft 365 business cloud suites . .
The European Union launched an antitrust investigation into the Microsoft Teams merger less than a year ago, in July 2023 — two years after a complaint from Teams competitor Slack.
Microsoft followed up the review by announcing a partial unbundling of Teams (which it eventually implemented in April 2024) in late August of last year. But the European Commission, announcing the results of its preliminary investigation on Tuesday, said it suspected the changes Microsoft made to its distribution of Teams were not enough to address its concerns and the tech giant must move on.
“The Commission is concerned that Microsoft has been bound since at least April 2019 Teams with its core SaaS productivity applications, limiting competition in the communications and collaboration market and defending its market position productivity software and its suite-focused model from competing individual software vendors,” the Commission wrote in a press release.
The EU suspects that Microsoft’s bundling has given Teams a “distribution advantage” over rival products such as Slack. The Commission’s preliminary view is also that this may have been further exacerbated by interoperability limitations between Teams’ competitors and Microsoft’s offerings. “This behavior could have been prevented by Teams‘ competitive competitors and thus innovations at the expense of customers in the European Economic Area,” he adds.
It’s not just chat-based apps like Slack that can be affected. As we pointed out earlier this year, video conferencing companies like Zoom have also been potentially affected over the years by Microsoft’s integration of Teams — an all-in-one product offering users messaging, voice and video calling, and conferencing. Since Slack filed its complaint, the EU noted, it has received another complaint from Germany-based alfaview GmbH, a video conferencing provider, which it said raised “similar concerns about the distribution of Teams.” The proceedings it has now launched against Microsoft will consider both Slack and alfaview’s complaints.
A formal finding of breach of EU competition rules could result in Microsoft being fined up to 10% of its annual global turnover. The bloc could also impose remedial measures if it decides steps are needed to restore competition.
Microsoft has been contacted for comment.
The statement of objections opens a new phase of the investigation in which Microsoft will be asked to respond to the EU’s preliminary findings, so the final outcome cannot be predicted. There is also no firm timetable for EU law enforcement to complete the investigation.
Responding to the development in a statement, Sabastian Niles, president and chief legal officer of Salesforce — the CRM giant that bought Slack in late 2020 — said: “The statement of objections issued today by the European Commission is a win for the customer. and confirmation that Microsoft’s practices with Teams harmed competition. We appreciate the Commission’s thorough investigation of Slack’s complaint and urge the Commission to pursue a swift, binding and effective remedy that will restore free and fair choice and foster competition, interoperability and innovation in the digital ecosystem.”
This message has been updated with a comment from Slack.