The European Commission has growing concerns that the technology giant Microsoft may have violated the EU antitrust rules by tying its Teams communication app to its workplace productivity suites, Office 365 and Microsoft 365. Brussels conveyed these concerns to the U.S.-based company after a preliminary inquiry concluded that Microsoft holds a dominant global position in the market for professional productivity software suites.
“We are worried that Microsoft might be giving its own Teams communication product an undue advantage by linking it to its popular business productivity suites”, stated Margrethe Vestager, the Executive Vice President, in a release. She emphasized that preserving competition in remote collaboration and communication tools is essential because it fuels innovation in these markets.
“If proven, the conduct would be illegal under our competition rules,” she added, after sending the formal charge document. The company, which has largely operated outside the European competition authorities’ spotlight for the past decade, could face fines of up to 10% of its worldwide annual revenue and corrective measures to restore competitive conditions.
Microsoft, headquartered in the United States, sells software for productivity and enterprise purposes and increasingly offers a cloud-based communication and collaboration tool. The application provides functions such as messaging, voice calls, video meetings, and file sharing, and it brings together Microsoft’s own tools with third-party apps and other services.
Cloud computing generally enables new market entrants to offer software-as-a-service solutions and lets customers run multiple programs from different providers. Yet Microsoft operates a business model centered on Teams, which bundles various software types into a single offering. When Teams launched, Microsoft integrated it into its widely adopted cloud suites Office 365 and Microsoft 365 for business clients.
Since at least 2019
The European Commission is concerned that starting in at least April 2019, Microsoft has tied Teams to its main SaaS productivity apps, potentially restricting competition in the field of communication and collaboration products and defending its dominant position in the productivity software market and in its suite-centered approach against standalone competitors.
Specifically, concerns center on whether Microsoft may have given Teams a distribution advantage by denying customers the choice to opt in or out of Teams when subscribing to its SaaS productivity apps. This advantage may have been amplified by interoperability limits between competing apps and Microsoft’s offerings. The commission notes that changes introduced in response to the Brussels inquiry last year are insufficient and that further behavioral adjustments are necessary to restore competition in the European Economic Area for the benefit of customers and rivals alike.