Microsoft under scrutiny in EU antitrust investigation for merging Teams and Office.
Microsoft under scrutiny in EU antitrust investigation for merging Teams and Office.
Microsoft Under EU Antitrust Investigation Over Bundling of Teams with Office
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Brussels, July 27 – In a bid to promote fair competition and consumer choice, the European Union (EU) has launched an antitrust investigation into Microsoft’s bundling of its Office product with its chat and video app, Teams. This development puts the US tech giant at risk of facing a substantial fine, adding to the 2.2 billion euros ($2.5 billion) it has already accumulated in EU antitrust fines over the past decade.
The Issue at Hand
Microsoft has historically found itself entangled with EU competition rules due to its practices of tying or bundling multiple products. However, in recent years the tech company has taken on a more conciliatory approach in its relationship with the European Commission, the executive branch of the EU responsible for antitrust enforcement.
The investigation stems from a complaint filed by Salesforce-owned workspace messaging app, Slack, in 2020. Despite Microsoft’s attempts to address the concerns raised by the EU competition enforcer, its proposed remedies were deemed insufficient, prompting the current investigation.
Teams, introduced by Microsoft in 2017 as a free addition to Office 365 with the intention of eventually replacing Skype for Business, experienced a surge in popularity during the pandemic. The addition of video conferencing capabilities to the platform further propelled its usage.
The Concerns
The European Commission is specifically investigating whether Microsoft’s bundling and defense of Teams is impeding competition in the communication and collaboration products market in Europe. The Commission’s primary aim is to uphold a competitive market, ensuring that businesses have the freedom to choose the products that best align with their needs.
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Margrethe Vestager, the EU’s antitrust chief, emphasized the importance of remote communication and collaboration tools like Teams in today’s business landscape. She stated, “We must therefore ensure that the markets for these products remain competitive, and companies are free to choose the products that best meet their needs.”
Microsoft, in response, expressed its commitment to cooperating with the European Commission and finding suitable solutions to address the concerns raised.
Implications and Reactions
If Microsoft fails to improve its concessions, the European Commission plans to issue formal charges against the tech giant in the autumn. Notably, EU fines for antitrust violations can reach up to 10% of a company’s global turnover, potentially leading to significant financial repercussions for Microsoft.
Critics argue that a price differential between Office with Teams and Office without the app would level the playing field with competitors, providing consumers with more choice. German rival, alfaview, which recently filed a complaint similar to Slack’s with the EU executive, has welcomed the investigation. CEO and founder Niko Fostiropoulos emphasized that the complaint aims to protect innovations of all kinds, broadening the significance beyond the rivalry between two US tech giants.
Conclusion
The EU’s antitrust investigation into Microsoft’s bundling of Teams with Office reflects the ongoing efforts to maintain competitive markets and safeguard consumer choice. While Microsoft has previously faced substantial fines, the company has demonstrated a more cooperative stance in recent dealings with the European Commission. The investigation’s outcome and any subsequent actions taken by the EU will have ramifications not only for Microsoft but for the wider communication and collaboration products market in Europe. As the case develops, industry players and consumers alike will be watching closely to see how the tech giant addresses the Commission’s concerns and shape the future of digital productivity tools on the continent.
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