European Union regulators on Tuesday charged Microsoft with breaking antitrust rules by bundling its Teams video conferencing and collaboration software with a suite of other productivity tools, giving it an unfair advantage over rivals.
Regulators said Microsoft’s packaging of Teams with other well-established software tools in Office 365 and Microsoft 365, which includes programs like Word, Excel, PowerPoint and Outlook, amounted to an illegal abuse of market dominance that rival companies like Zoom and Slack could not match. Regulators said businesses essentially had little choice but to take Teams if they wanted other software made by Microsoft.
The charges are just the latest in a barrage of announcements by the European Union in recent months in its effort to crack down on the world’s largest tech platforms. On Monday, regulators accused Apple of violating competition rules because of its App Store policies. Amazon, Google, Meta, TikTok and X are also facing investigations related to their business practices and services.
The Microsoft case has its roots in the Covid-19 pandemic, when videoconferencing and collaboration tools like Zoom, Slack and Teams became essential for remote workforces. In 2020, Slack, now owned by Salesforce, complained to regulators that Microsoft’s bundling of Teams with other productivity software was anticompetitive, setting off the initial E.U. investigation.
E.U. regulators said Microsoft had an unfair “distribution advantage” by not giving customers a choice of whether to buy Teams when purchasing other software. Rivals makers of videoconferencing tools also face challenges making their services work with other Microsoft software, regulators said.
“The conduct may have prevented Teams’ rivals from competing, and in turn innovating, to the detriment of customers,” the European Commission, the European Union’s executive branch conducting the investigation, said in a statement.
The charges brought on Tuesday are one step in a long process. Microsoft can now respond to the complaint, but if the two sides do not reach an agreement, the company could face a fine of up to 10 percent of its annual global revenue.
The case has parallels to the antitrust charges brought decades ago by the U.S. Justice Department against Microsoft for bundling Internet Explorer inside its Windows operating system, a case that was eventually resolved.
On Tuesday, Microsoft said it had taken steps to resolve the dispute. Last year, Microsoft agreed to sell Teams separately from Office products.
“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.” Brad Smith, Microsoft’s president, said in a statement.
The European Commission said Microsoft’s changes were “insufficient” and called for more changes to be made to “restore competition,” without specifying what those changes should be.