The European Commission on Thursday opened a formal investigation into whether US giant Microsoft breached EU competition rules by linking its Teams video conferencing app to its popular Word, Excel, Powerpoint and Outlook software. Referring to the integration of Teams by Microsoft in its suites for Office 365 and Microsoft 365 professional customers, the Commission expressed concern that the American group “abuse of its position on the software market” to favor its messaging and videoconferencing service in detriment of competitors.
The case started in July 2020 with a complaint from the American start-up Slack, which has since been acquired by Salesforce. Faced with losing market share in the business messaging market, Slack had filed a complaint against Microsoft for unfair competition with the European executive. Microsoft is suspected of having abused its dominant position in office software, by associating Teams, at no additional cost, with its famous Word, Excel, Powerpoint and Outlook software.
If these suspicions are proven, the American tech giant, already sanctioned several times by Brussels, could be imposed a new heavy fine.
The dispute arose in the midst of the development of teleworking since the coronavirus pandemic, a context which has exploded demand for videoconferencing applications. “Remote communication and collaboration tools such as Teams have become essential for many companies in Europe. We must therefore ensure that the markets for these products remain competitive and that companies are free to choose the products that best suit their needs,” said EU Competition Commissioner Margrethe Vestager.
Microsoft reacted immediately by promising to cooperate with Brussels. “We respect the work of the European Commission in this matter and take our own responsibilities very seriously. We will continue to cooperate with the Commission and are committed to finding solutions that address their concerns,” a company spokesperson said. After gathering evidence during three years of informal proceedings, the Commission is concerned that consumers do not have the choice whether or not to include Teams when they subscribe to Microsoft office suites. It also fears that the Redmond group (west coast of the United States) will limit the interoperability between its products and those of competitors.
Other applications such as Zoom, Google Meet or Cisco Webex are available on the market and already compete with Teams.
“These practices may constitute anti-competitive tied or bundled sales,” said the European executive, announcing Thursday the opening of the formal investigation. Microsoft has already been sentenced by the European Commission to nearly 2 billion euros in fines in various proceedings for infringements of European competition rules. The last, for an amount of 561 million euros, was inflicted in 2013 for having imposed its Internet Explorer browser, then associated with the Windows operating system. Salesforce, a customer relationship technology specialist, bought Slack for nearly $28 billion in December 2020 to better compete with Microsoft.
After spending years chasing after infringements by tech giants in endless legal proceedings, the EU recently adopted a Digital Markets Regulation (DMA) to better combat anti-competitive practices. The text, which will apply in particular to Gafam (Google, Apple, Facebook, Amazon and Microsoft) from next year, must make it possible to act upstream by imposing rules to be respected under penalty of dissuasive fines.
