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Microsoft Faces EU Antitrust Charges Over Teams Integration
Microsoft Corp. is under scrutiny by European Union regulators, who have accused the tech giant of misusing its market dominance through the integration of its Teams video-conferencing app with other business software packages. The European Commission issued a statement of objections, alleging that bundling Teams with Office 365 and Microsoft 365 contravenes competition regulations within the EU, thereby granting Teams an unfair market advantage since at least 2019. This advantage has been further bolstered by limited compatibility with rival software applications.
Margrethe Vestager, the EU's competition commissioner, emphasized the importance of maintaining competition for remote communication and collaboration tools, underlining its role in driving market innovation. Antitrust penalties in such cases can be as high as 10% of a company's global revenue, although fines rarely reach that upper limit.
Microsoft has struggled to alleviate regulatory concerns, though it remains open to further adjustments to avert penalties. Company President Brad Smith indicated Microsoft's commitment to addressing the commission's remaining issues, noting that the firm has already separated Teams from other products and initiated steps to improve interoperability.
The EU's investigation was triggered by a complaint from messaging platform Slack in 2019, which Salesforce Inc. acquired for $27.7 billion in 2021. Reflecting on the commission’s warning, Salesforce President Sabastian Niles called for a swift and effective resolution to restore competitive balance in the market.
The pandemic significantly boosted the usage of Microsoft Teams, with global daily users surging from about 2 million in 2017 to 300 million by 2023. Critics argue that Microsoft's dominance in PC software facilitated Teams’ widespread adoption among remote workers already using other Microsoft programs.
Microsoft's history with antitrust regulators is long-standing, featuring multiple clashes in the US and Europe over allegations of product tying and restricting competitor access to desktop software. Despite accumulating over €2 billion ($2.1 billion) in EU fines over the years, Microsoft has mostly navigated clear of intense antitrust scrutiny recently, with much of the attention shifting to Google's practices.
Nonetheless, Microsoft’s $69 billion acquisition of game developer Activision Blizzard has recently reignited competition concerns worldwide. The EU eventually greenlit the deal after Microsoft made substantial concessions, following an initial warning against the merger.
