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Microsoft Faces Antitrust Investigation by EU Over Teams Bundling

Microsoft is undergoing its first antitrust investigation in the EU in nearly 15 years over the bundling of its Teams software with its Office productivity suite.

EU Probes Microsoft Over Teams Bundling

The European Commission has launched a formal antitrust investigation into Microsoft, scrutinizing the tech giant's bundling of its Teams software with its Office productivity suite. This is the first antitrust examination of Microsoft in the EU in close to 15 years. The investigation follows a complaint filed by Slack against Microsoft for anti-competitive behavior in July 2020, shortly after the global pandemic onset led to a rapid expansion in Microsoft Teams' user base.

The European Commission will deeply probe whether Microsoft might have violated EU competition regulations by tying or bundling Microsoft Teams to its Office 365 and Microsoft 365 productivity suites.

"Many businesses in Europe consider remote communication and collaboration tools like Teams as indispensable," said Margrethe Vestager, executive vice-president in charge of competition policy at the European Commission. She added that the market for these products must remain competitive and companies should be free to select the products that best suit their needs. Hence, the investigation aims to determine if Microsoft’s tying of its productivity suites with Teams breaches EU competition rules.

Microsoft has reacted to the EU’s allegations. Robin Koch, a Microsoft spokesperson, said in a statement “We respect the European Commission’s work on this case and take our own responsibilities very seriously. We will continue to cooperate with the Commission and remain committed to finding solutions that will address its concerns.”

Slack's initial complaint accused Microsoft of "illegally tying" its Microsoft Teams product to Office, "force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers." Now that EU regulators are thoroughly investigating the situation, Microsoft has reportedly offered to stop bundling Teams with Office as a concession to the EU. This move, however, didn't suffice to evade an official antitrust investigation.

Microsoft recently decided to eliminate its Microsoft Teams integration in Windows 11 as well. While the Chat functionality in Windows 11 was available only for consumers, not enterprise users that were the focus of Slack’s complaint, Microsoft could have expanded enterprise support in the built-in version in the future. It's possible that the EU probe might have prompted Microsoft to remove the integration entirely.

This investigation marks Microsoft's first EU antitrust probe in almost 15 years, following two major cases related to Windows Media Player and Internet Explorer bundling. In 2004, the European Commission required Microsoft to provide a version of Windows without a bundled Media Player, resulting in a Windows XP N version available in EU markets. In 2009, a similar case with Internet Explorer led to Microsoft selling a Windows 7 E version in Europe without the browser bundled and a subsequent $730 million fine for failing to include a browser selection box in Windows 7 SP1.