The European Union on Tuesday accused Microsoft of violating competition rules. In a formal statement of objections, the union said it suspected the software giant of abusing antitrust rules by bundling its real-time communications and collaboration tool Teams with popular productivity apps, including its cloud-based business suites Office 365 and Microsoft 365.
The EU launched an antitrust investigation into Microsoft’s Teams bundling almost a year ago, in July 2023 – two years after a complaint from Teams competitor Slack.
Microsoft followed the scrutiny by announcing a partial unbundling of Teams in late August last year (which it eventually implemented in April 2024). However, in announcing the results of its preliminary investigation on Tuesday, the European Commission said it suspected that the changes Microsoft had made to the distribution of Teams were not enough to address its concerns and that the tech giant needed to take further steps.
“The Commission is concerned that since at least April 2019, Microsoft Team with its core SaaS productivity applications, thereby limiting competition in the market for communications and collaboration products and weakening its market position in productivity software and its suite-centric model from competing individual software providers,” the Commission wrote in a press release.
The EU suspects that Microsoft’s bundling gave Teams a “distribution advantage” over rival products such as Slack. The Commission’s preliminary assessment is that this advantage may have been exacerbated by interoperability restrictions between Teams’ competitors and Microsoft’s offerings. “The conduct may have prevented Teams from‘ “To prevent competitors from competing and thereby introducing innovations to the detriment of customers in the European Economic Area,” it continues.
It’s not just chat-based apps like Slack that could be affected. As we highlighted earlier this year, video conferencing companies like Zoom may also have been affected over the years by how Microsoft has bundled Teams – an all-in-one product that offers users messaging, voice and video calls, and conferencing. In fact, since Slack filed its complaint, the EU has received another complaint from German firm alfaview GmbH, a video conferencing provider.
If found to have breached EU competition rules, Microsoft could be fined up to 10% of its annual global turnover. The Union could also impose remedies if it decides that steps are necessary to restore competition.
Microsoft was contacted for comment.
The Statement of Objections will launch a new phase of the investigation, requiring Microsoft to respond to the EU’s preliminary findings. The final outcome cannot therefore be predicted. There is also no fixed timeline for the EU enforcement authorities to complete their investigations.
The Commission’s press release states that it has received a second complaint about Teams. The complaint comes from a German company called alfaview GmbH, which raises “similar concerns about the proliferation of Teams”. The procedure now opened against Microsoft will examine both the complaints from Slack and alfaview.
Commenting on the development, Sabastian Niles, President and Chief Legal Officer of Salesforce – the CRM giant that acquired Slack in late 2020 – said: “The Statement of Objections issued today by the European Commission is a victory for customer choice and a confirmation that Microsoft’s practices with Teams have harmed competition. We welcome the Commission’s thorough investigation of Slack’s complaint and call on the Commission to take swift, binding and effective remedial action that restores free and fair choice and promotes competition, interoperability and innovation in the digital ecosystem.”
This report has been updated with comment from Slack