European Commission Investigating Teams Bundling in Microsoft 365 as Unfair Competition

Microsoft's practices under investigation following Slack complaint.

The European Union's European Commission (EC) announced on Thursday that it has opened an investigation into Microsoft's bundling of Teams in its productivity suite offerings as a possible violation of competition rules.

Microsoft Teams is a collaboration service that comes with Office 365 and Microsoft 365 subscriptions, which also includes productivity apps (Excel, PowerPoint and Word) and SharePoint online solutions, such as OneDrive storage. The EC explained that bundling Teams with this productivity software could give Teams a distribution advantage over competing collaboration products.

Here's how the EC expressed that notion:

The Commission is concerned that Microsoft may be abusing and defending its market position in productivity software by restricting competition in the European Economic Area (‘EEA') for communication and collaboration products.

The complaint was lodged by Slack Technologies on "14 July 2020," where Slack alleged that "Microsoft illegally tied Teams to its dominant productivity suites," the EC indicated.

Microsoft and Slack apparently didn't publish any notices about the EC's investigation, but a Microsoft spokesperson provided the following comment, via e-mail:

We respect the European Commission's work on this case and take our own responsibilities very seriously. We will continue to cooperate with the Commission and remain committed to finding solutions that will address its concerns.

The EC announcement noted that it's contrary to European Union law for a company to use its market dominance in one product area to restrict competition in other product markets. The announcement explained that "Article 102 TFEU prohibits the abuse of a dominant position that may affect trade within the EU and prevent or restrict competition."

The next steps in the investigation weren't described, although the commission has "no legal deadline for bringing an antitrust investigation to an end."

Microsoft has faced such cases before. It had to unbundle its Internet Explorer browser from the Windows operating system and offer a "Web browser choice screen" to European Union Windows purchasers after the commission determined in Jan. 2009 Statement of Objections that IE bundling had harmed companies with competing browsers.   

The EC fines companies that violate EU competition rules. It's based on a percentage of sales (perhaps 30 percent) over the infringement period.

The EC is tracking this current case, with Slack being the complainant about Teams bundling, via "case number AT.40721" at the EC's competition website. The short article that currently is posted there also mentioned that the EC was investigating "potential restrictions to the integration and interoperability of third-party products with Microsoft's products, to the advantage of Microsoft Teams."

About the Author

Kurt Mackie is senior news producer for 1105 Media's Converge360 group.


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