EU accuses Microsoft of competition breach over Teams bundling

The European Union accused Microsoft of breaching competition rules Tuesday. In a formal statement of objections the bloc said it suspects the software giant of abusing antitrust rules by bundling its real-time comms and collaboration tool, Teams, with popular productivity apps, including its cloud-based suites for businesses Office 365 and Microsoft 365.

The EU opened an antitrust probe of Microsoft’s bundling of Teams just under a year ago, back in July 2023 — two years after a complaint by Teams rival Slack.

Microsoft followed the scrutiny by announcing a partial unbundling of Teams in late August last year. However announcing the results of its preliminary investigation Tuesday, the European Commission said it suspects the changes Microsoft made to Teams’ distribution last year were insufficient to address its concerns and the tech giant needs to go further.

“The Commission is concerned that, since at least April 2019, Microsoft has been tying Teams with its core SaaS productivity applications, thereby restricting competition on the market for communication and collaboration products and defending its market position in productivity software and its suites-centric model from competing suppliers of individual software,” the Commission wrote in a press release.

The EU suspects Microsoft’s bundling has given Teams a “distribution advantage” vs rival products, such as Slack. The Commission’s preliminary view is also that this may have been further exacerbated by interoperability limitations between Teams’ competitors and Microsoft’s offerings. “The conduct may have prevented Teams‘ rivals from competing, and in turn innovating, to the detriment of customers in the European Economic Area,” it adds.

A formal finding of a breach of EU competition rules could result in Microsoft being fined up to 10% of its annual worldwide turnover. The bloc could also impose remedies if it decides steps are required to restore competition.

Microsoft has been contacted for comment.

The statement of objections opens a new phase in the investigation, in which Microsoft will be invited to respond to the EU’s preliminary findings so the final outcome cannot be predicted. There is also no fixed timeline for EU enforcers to complete their investigations.

The Commission’s press release notes it has received a second complaint regarding Teams, made by a German company called alfaview GmbH, which it said raised “similar concerns regarding the distribution of Teams”. The proceedings it has now opened against Microsoft will consider both Slack’s and alfaview’s complaints.