European Union regulators on Tuesday accused Microsoft of violating antitrust laws by bundling its video conferencing and collaboration software, Teams, with other productivity tools, giving the company an unfair advantage over rivals.
Regulators said Microsoft’s packaging of Teams with other popular software tools within Office 365 and Microsoft 365, which include programs such as Word, Excel, PowerPoint and Outlook, amounts to an illegal abuse of market power that rivals such as Zoom and Slack cannot match. If companies want other Microsoft software, they essentially have little choice but to choose Teams, they said.
The charges are just the latest in a series of announcements by the European Union in recent months as part of its efforts to crack down on the world’s largest tech platforms. Regulators on Monday accused Apple of violating competition law with its App Store policies. Amazon, Google, Meta, TikTok and X are also facing investigations related to their business practices and services.
Microsoft’s lawsuit stems from the coronavirus pandemic, when video conferencing and collaboration tools like Zoom, Slack and Teams became essential for remote work. In 2020, Slack, now owned by Salesforce, complained to regulators that Microsoft’s bundling of Teams with other productivity software was anti-competitive, sparking the first EU investigation.
EU regulators said Microsoft had gained an unfair “distribution advantage” by not giving customers a choice between buying Teams when they bought other software. Rival makers of video conferencing tools also had challenges getting their services to work with other Microsoft software, they said.
“This conduct may have undermined competition for Teams’ rivals, thereby stifling innovation and harming customers,” the European Commission, the EU’s executive body conducting the investigation, said in a statement.
The complaint filed on Tuesday is the first step in a long process. Microsoft can now respond to the lawsuit, but if the two sides can’t reach an agreement, the company could be fined up to 10% of its annual global revenue.
The case is similar to one that the Department of Justice brought and ultimately settled decades ago against Microsoft for violating antitrust laws over its inclusion of Internet Explorer in the Windows operating system.
Microsoft announced on Tuesday that it had taken steps to resolve the dispute. Last year, Microsoft agreed to sell Teams separately from its Office products.
“Having unbundled Teams and taken initial steps around interoperability, we appreciate the further clarification provided today and remain committed to finding a solution that addresses the Committee’s concerns,” Microsoft President Brad Smith said in a statement.
The Commission said Microsoft’s changes were “insufficient” and that further changes were needed to “restore competition”, but did not specify what changes should be made.
