Microsoft faces huge fine after EU accuses it of breaking antitrust rules with Teams

Microsoft may face a big EU fine after the European Commission accused it of breaking EU antitrust rules by unfairly bundling Teams with Microsoft Office software.

In a preliminary ruling, the Commission said that the move unfairly discriminated against competitors because Microsoft has such a dominant lock on office software systems.

Microsoft has been found guilty of this behaviour before and heavily sanctioned, most notably when it crushed web browser rivals by bundling Internet Explorer with Windows.

“We are concerned that Microsoft may be giving its own communication product Teams an undue advantage over competitors, by tying it to its popular productivity suites for businesses,” said the Commission’s vide-president in charge of competition policy, Margrethe Vestager.

The investigation was kicked off last July after a complaint by Slack, a messaging platform that is now owned by Salesforce. A second complaint was lodged by the German video-conferencing service Alfaview.

Formally classed as a ‘statement of objection’, the Commission’s preliminary ruling is an advanced step toward a decision on the issue. Microsoft now has an opportunity to present an alternative case. However, it has already made some changes in how it bundles Teams with Microsoft products, changes deemed insufficient by the Commission.

A maximum fine of up to 10pc of the company’s total annual worldwide turnover is possible, under the European law.

“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 said in its statement today.

“In particular, the Commission is concerned that Microsoft may have granted Teams a distribution advantage by not giving customers the choice whether or not to acquire access to Teams when they subscribe to their SaaS productivity applications. This advantage 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’s the latest in European antitrust activity against big tech firms.

Yesterday, in the first action to be taken against a company under Europe’s recently-enacted Digital Markets Act, the Commission announced that Apple was in breach of EU rules for failing to let developers and competitors inform customers about alternatives.

In March, Apple was fined €1.8bn by the European Commission for discriminating against Spotify and other music apps by preventing them from telling customers about cheaper, alternative methods of subscribing outside the app.

Last week, Apple said it would delay the rollout of its newly-announced AI features for iPhones and Macs because of its concerns over regulatory clashes with Europe.

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