Microsoft's Office suite may soon face scrutiny from the European Union (EU), as the bloc's competition watchdog is reportedly mulling over launching an antitrust probe into the software giant. According to a report by Reuters, the EU is concerned that Microsoft is using its dominant position in the productivity software market to push its cloud services to customers, making it difficult for them to switch to other providers.
The investigation is the result of a complaint filed by Salesforce-owned Slack in 2020. Slack alleged that Microsoft's bundling of Teams with Office gives the company an unfair advantage in the market for collaboration software.
The EC has been investigating the complaint for the past two years. In recent months, the two companies have held discussions about potential remedies to the EC's concerns. However, these discussions have hit a roadblock, and the EC is now likely to open a formal antitrust investigation.
If the EC finds that Microsoft has violated antitrust laws, the company could be fined up to 10% of its global annual turnover. In April, Microsoft said it would separate Teams from Office in the EU, essentially selling both products individually. It is unclear if that concession is enough to appease regulators.
Mounting Pressure on Microsoft's Cloud Business Practices
The report, which cites unnamed sources familiar with the matter, claims that the EU has received complaints from some of Microsoft's competitors, who allege that the company is tying its cloud products, such as OneDrive, SharePoint, and Teams, to its popular Office applications, such as Word, Excel, PowerPoint, and Outlook. This could create a lock-in effect for customers, who may find it hard to migrate their data and workflows to alternative cloud platforms.
The EU is also reportedly worried about Microsoft's data collection practices, and whether they comply with the bloc's strict privacy regulations, such as the General Data Protection Regulation (GDPR). The report suggests that the EU is looking into how Microsoft handles the personal data of its Office users, and whether it gives them enough control and transparency over their data.
In May, the European Commission opened an investigation into Microsoft's Azure cloud business. The probe comes amid rising concerns that the US tech giant is leveraging its market power to edge out rivals.
The EC's investigation is focused on two main areas:
- Whether Microsoft is using its dominant position in the operating system market to give its Azure cloud business an unfair advantage.
- Whether Microsoft is using its relationships with large customers to lock them into its Azure cloud platform.
The regulators want to find out if Microsoft is locking in its customers and rivals by making it hard for them to access and use their own data on its cloud platforms. They will also investigate if Microsoft is forcing its customers to sign contracts that prevent them from moving and sharing their data across different cloud services.