Microsoft is accused of violating European Union antitrust laws by bundling its Teams software with apps such as Office 365 and Microsoft 365, an aggressive business tactic that regulators called “probably abusive.”
The European Commission said on Monday it had notified the US tech giant Microsoft of accusations that the company is “restricting competition” by bundling Teams with its core office productivity applications.
The committee on Monday took aim at another US tech giant, Apple. It accused the iPhone maker of blocking other app developers from offering customers cheaper options outside the App Store, violating rules meant to promote competition.
Microsoft is facing antitrust charges from the European Union. NurPhoto via Getty Images
The European Commission, which enforces antitrust laws in the EU, claims that Microsoft gave Teams a “distribution advantage” by not giving customers a choice between Teams or not when purchasing software.
Microsoft was also accused of restricting the ability of rival messaging apps to integrate with its own software.
“We are concerned that Microsoft is giving its competitors an unfair advantage by linking its communications product, Teams, with a popular business productivity suite,” Margrethe Vestager, the European Commission’s executive vice-president for competition policy, said in a statement.
“Maintaining competition in remote communication and collaboration tools is also essential to spur innovation in these markets.”
The European Commission said Microsoft’s bundling of its Teams software with office suites such as Office 365 was “probably unfair.” Getty Images
Microsoft began marketing Office 365 and Microsoft 365 to European customers without Teams last year to avoid antitrust conflicts with the EU, before the company expanded the same offer to its global customer base.
The two software suites include programs such as Word, Excel, and Outlook.
But the commission said Tuesday that the changes were not enough and that Windows makers needed to do more to “restore competition.”
“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 concerns,” Microsoft President Brad Smith said in a statement provided to The Washington Post.
Microsoft could be subject to fines equal to up to 10% of its annual global revenue. In the 12 months ended March 31, Microsoft made about $212 billion in worldwide revenue.
The EU can also force Microsoft to enact “remedies” to ensure compliance with antitrust laws.
Microsoft is accused of forcing customers who buy its office suite to use Teams. PhotoGranary – stock.adobe.com
Last July, Slack Technologies filed a complaint against Microsoft with European authorities, followed by video conferencing software maker Alfaview, which filed a complaint against Microsoft.
Slack, a subsidiary of business software maker Salesforce, claimed that Microsoft was abusing its market power and stifling competition by illegally bundling Teams with its Office suite.
“The Statement of Objections issued by the European Commission today is a victory for customer choice and confirms that Microsoft’s practices with Teams have harmed competition,” said Sabastian Niles, president and chief legal officer at Salesforce.com.
“We appreciate the Commission’s thorough investigation of Slack’s complaint and urge the Commission to move toward swift, binding and effective remedies that restore free and fair choice and foster competition, interoperability and innovation in the digital ecosystem.”
The Department of Justice filed a sweeping antitrust lawsuit against Apple this year, alleging that the company illegally monopolized the smartphone market, eliminating competitors, stifling innovation and keeping prices artificially high.
With post wire
