The European Union said on Tuesday that Microsoft abused its market power by bundling its chat and video conferencing program Teams with other popular business apps, giving its service an advantage over rivals such as Slack and Zoom.
The European Union, in a preliminary investigation, called the practices “probably unfair” and warned that they could face antitrust fines of up to 10 percent of global revenue. The attack is the latest in a series of actions targeting the business practices of major U.S. technology companies. In its first action under the new regime, the bloc on Monday accused Apple of violating landmark new competition rules.
Microsoft has built Teams into its ubiquitous suite of office programs, including Word, Excel and email service Outlook, since at least 2019. The EU alleges that the company did not give customers the choice of whether to subscribe to Teams when buying other Microsoft programs. Microsoft may have further strengthened this advantage by making it harder for rival applications to work with its office software, the EU said.
The pandemic has forced companies to increasingly rely on tools like Teams, Slack and Zoom to facilitate remote working, but the EU alleges that Microsoft's practices may have stifled innovation in communications software. The EU launched an investigation last year after receiving complaints from competitors such as Slack.
“Maintaining competition in remote communication and collaboration tools is essential to foster innovation in these markets,” said Margrethe Vestager, the European Commission's executive vice-president for competition policy.
The EU's concerns echo a landmark lawsuit brought by the U.S. government against Microsoft in the 1990s, which alleged the company abused its market power to give its internet browser an advantage.
In the decades since that clash, Microsoft has built one of the most sophisticated global lobbying organizations. But as it expands into gaming, AI and other new technologies, the company has increasingly become a target for regulators. Earlier this month, the Department of Justice and the Federal Trade Commission reached an agreement that sets the stage for an antitrust investigation into Microsoft's relationship with OpenAI.
After the European Commission began its investigation, Microsoft made certain changes to how it distributed Teams, including offering suites that did not include Teams, but the EU concluded that these changes were insufficient.
“Having unbundled Teams and taken initial steps on interoperability, we appreciate the further clarification provided today and remain committed to finding a solution that addresses the European Commission's remaining concerns,” Microsoft President Brad Smith said in a statement on Tuesday.
European regulators said Microsoft put competitors at a disadvantage by not giving customers a choice whether to download Teams, and that the company may have benefited from a lack of interoperability with rival communications platforms.
Salesforce, which now owns Slack, called the European Commission's announcement a “victory for customer choice.”
“We appreciate the Commission's thorough investigation of Slack's complaint and urge the Commission to provide swift, binding and effective relief,” said Sabastian Niles, Salesforce's president and chief legal officer.
