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EU charges Microsoft over Teams bundling

EU charges Microsoft over Teams bundling

Microsoft Teams

The European Commission has accused Microsoft of violating antitrust rules by bundling its Teams messaging and videoconferencing app with its widely used business software. The commission informed Microsoft of its preliminary view that the tech giant has been “restricting competition” by integrating Teams with core office productivity applications like Office 365 and Microsoft 365. The commission suspects that Microsoft might have granted Teams a “distribution advantage” by including it with these software bundles, limiting customer choice.

Margrethe Vestager, the commission’s executive vice-president for competition policy, said in a statement, “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.

Microsoft made some changes last year to avoid penalties, including offering the software without Teams for European customers. However, the commission stated Tuesday that these changes were insufficient to address its concerns and that further measures are necessary. Microsoft President Brad Smith said in a prepared statement, “Having unbundled Teams and taken initial interoperability steps, we appreciate the additional clarity provided today and will work to find solutions to address the Commission’s remaining concerns.” In April, the company also offered customers worldwide the option to get Microsoft 365 and Office 365 without Teams.

Microsoft’s Teams antitrust issues

This case follows a complaint filed by rival Slack Technologies in July 2023. Slack, owned by business software maker Salesforce, alleged that Microsoft abused its market dominance to eliminate competition, in violation of EU laws.

Alfaview, which makes videoconferencing software, also lodged a separate complaint. Salesforce President Sabastian Niles said, “The Statement of Objections issued today by the European Commission is a win for customer choice and an affirmation that Microsoft’s practices with Teams have harmed competition.”

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The case underscores Brussels’ role as a leading watchdog for Big Tech companies and highlights the ongoing regulatory scrutiny these firms face globally. Microsoft now has a chance to respond to the accusations before the commission decides.

The company could face a fine worth up to 10% of its annual global revenue or be required to implement “remedies” to satisfy the competition concerns.

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