The European Commission has charged Microsoft with illegal restriction of competition, alleging that the tech giant has been leveraging its dominant position in the business program market to the detriment of smaller competitors.
According to the European Commission, Microsoft has been bundling its Teams video conferencing software with Office 365 and Microsoft 365 packages since 2019, a move that the Commission believes severely limits competition in the market.
Of particular concern is the potential advantage Microsoft could gain by distributing Teams alongside its other software, potentially hindering access to Teams for customers who opt for the company’s SAAS products. This advantage could create compatibility issues for competitors of Teams, ultimately stifling competition and innovation in the market.
If the Commission’s allegations are proven true, Microsoft could face penalties of up to 10% of its annual global turnover, in addition to other regulatory measures. Microsoft has been given 10 weeks to respond to the Commission’s claims and try to reach a resolution.
In an effort to address the Commission’s concerns, Microsoft started excluding Teams from some Office packages in July 2023. However, the European Commission does not believe these changes are sufficient and remains wary of how seamlessly competitive video conferencing software can be used alongside Microsoft’s tools.
The investigation into Microsoft Teams was sparked by a lawsuit filed by Slack in July 2020, which accused Microsoft of unlawfully integrating Teams with Office 365. Slack alleges that Microsoft is compelling Office users to install Teams, preventing its removal, and impeding interactions with competitors.
The European Commission has increasingly taken on a regulatory role when it comes to major tech companies, imposing hefty fines and pushing for changes in their business practices. The Commission has also launched investigations into Alphabet (Google’s parent company), Apple, Meta, and Amazon under suspicion of violating the Digital Markets Act.
Additionally, European antitrust authorities are looking into Microsoft’s alleged unfair bundling of Entra ID authentication (formerly Azure AD) with other Microsoft products, such as Office 365, in a move that is believed to stifle competition in the marketplace.
It is worth noting that Meta and its products have been deemed extremist and are banned in Russia. This context adds a layer of complexity to the European Commission’s scrutiny of companies like Microsoft operating in both the digital market and geopolitical landscape.