European Union regulators on Tuesday accused Microsoft of violating antitrust rules by bundling its Teams video conferencing and collaboration software with a suite of other productivity tools, giving it an unfair advantage over rivals.
Regulators said Microsoft's packaging of Teams with other established software tools in Office 365 and Microsoft 365, which include programs such as Word, Excel, PowerPoint and Outlook, amounts to an unlawful abuse of market dominance that Rival companies like Zoom and Slack couldn't match. . Regulators said companies essentially had no choice but to adopt Teams if they wanted other software made by Microsoft.
The charges are just the latest in a series of announcements by the European Union in recent months in its bid to crack down on the world's largest tech platforms. On Monday, regulators accused Apple of violating competition rules over its App Store policies. Amazon, Google, Meta, TikTok and X are also facing investigations related to their business practices and services.
The Microsoft case has its roots in the Covid-19 pandemic, when video conferencing and collaboration tools such as Zoom, Slack and Teams became essential for the remote workforce. In 2020, Slack, now owned by Salesforce, complained to regulators that Microsoft's bundling of Teams with other productivity software was anti-competitive, triggering the initial EU investigation.
EU regulators said Microsoft had an unfair “distribution advantage” by not giving customers a choice whether to buy Teams when they bought other software. Rival makers of video conferencing tools also face challenges making their services work with other Microsoft software, regulators said.
“The behavior may have prevented Teams' rivals from competing and, in turn, innovating, to the detriment of customers,” the European Commission, the European Union's executive branch leading the investigation, said in a statement.
The charges filed Tuesday are just one step in a long process. Microsoft can now respond to the complaint, but if the two sides don't reach an agreement, the company could face a fine of up to 10% of its annual global revenue.
The case has parallels to antitrust charges brought decades ago by the U.S. Justice Department against Microsoft for packing Internet Explorer into its Windows operating system, a case that was eventually settled.
Microsoft said Tuesday that it had taken steps to resolve the dispute. Last year, Microsoft agreed to sell Teams separately from its Office products.
“Having separated the Teams and adopted the first interoperability measures, we appreciate the increased clarity provided today and will work to find solutions to address the commission's remaining concerns.” Brad Smith, president of Microsoft, said this in a statement.
The European Commission said Microsoft's changes were “insufficient” and called for further changes to “restore competition”, without specifying what those changes should be.