The European Commission has launched a formal antitrust investigation into Microsoft's practice of bundling its Teams software with its Office productivity suite. The probe will examine whether Microsoft may have violated EU competition rules by tying or bundling Microsoft Teams to its Office 365 and Microsoft 365 products, which are widely used by businesses and consumers.
Teams is a collaboration and conferencing app that competes with Slack, Zoom, and other online tools. The app has seen a surge in popularity during the coronavirus pandemic, as more people work and study from home. According to Microsoft, Teams has more than 280 million monthly active users as of July 2023.
The EU investigation is the result of a complaint filed by Slack in July 2020, when the company accused Microsoft of abusing its market power and stifling competition. Slack alleged that Microsoft had “illegally tied” its Microsoft Teams product to Office and is “force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers.” Slack also claimed that Microsoft was using its dominant position in the operating system market to promote Teams to Windows users.
“Remote communication and collaboration tools like Teams have become indispensable for many businesses in Europe,” says Margrethe Vestager, executive vice-president in charge of competition policy at the European Commission. “We must therefore ensure that the markets for these products remain competitive, and companies are free to choose the products that best meet their needs. This is why we are investigating whether Microsoft's tying of its productivity suites with Teams may be in breach of EU competition rules.”
Europe's War on Big Tech Anti-Competition
The EU has a history of taking action against Microsoft for bundling its products, such as Windows Media Player and Internet Explorer, with its Windows operating system. In 2004, the European Commission ordered Microsoft to offer a version of Windows without Media Player bundled. This resulted in a Windows XP N version available in EU markets. In 2009, the EU also forced Microsoft to offer a browser choice screen to Windows users in Europe, after finding that the company had breached antitrust rules by bundling Internet Explorer with Windows.
Microsoft has reportedly offered a concession to the EU to stop bundling Microsoft Teams with Office in the region. The company also recently decided to remove some parts of its Microsoft Teams integration in Windows 11. The Chat functionality in Windows 11 was only ever available for consumers and not the key enterprise users that were the focus of Slack's complaint. But Microsoft could have enabled enterprise support in the future in this built-in version, and it's possible the EU probe might have spooked Microsoft into killing the integration altogether.
“We respect the European Commission's work on this case and take our own responsibilities very seriously,” says Microsoft spokesperson Robin Koch, in a statement to The Verge. “We will continue to cooperate with the Commission and remain committed to finding solutions that will address its concerns.”
The EU investigation could take several years to complete and could result in hefty fines or remedies for Microsoft if it is found guilty of antitrust violations. The EU has previously fined Google more than €8 billion ($9.4 billion) for various antitrust cases involving its Android operating system, its online shopping service, and its advertising business.