Microsoft hit with antitrust violation warning in EU over bundling of Teams

This morning the European Commission issued a Statement of Objections to Microsoft for violating antitrust rules by bundling Teams into its SaaS subscription platform Microsoft 365, which also includes products like Word, Excel, PowerPoint, Outlook, and OneDrive.

“The Commission is concerned that, since at least April 2019, 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 European Commission wrote in a statement.

They argue that by bundling Teams into Microsoft 365 with its other commonly used SaaS products, Microsoft has given Teams a distribution advantage. 

The European Commission first started investigating Microsoft on this issue in July 2023, following a complaint from Slack, a Teams competitor. Shortly after, Microsoft announced it would start unbundling Teams from Microsoft 365 in EU markets starting in October 2023. And then, in April of this year, Microsoft announced it would unbundle Teams from Microsoft 365 everywhere. 

However, in its statement the European Commission said “these changes are insufficient to address its concerns and that more changes to Microsoft’s conduct are necessary to restore competition.”

Microsoft now has the opportunity to review the commission’s investigation file, reply in writing, and request a hearing to present their case. If the commission then concludes Microsoft is still infringing on the rules, it can prohibit the conduct and fine Microsoft up to 10% of its annual worldwide turnover. There is no deadline for completing the investigation, according to the commission. 

Microsoft’s president Brad Smith said in a 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.”

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