The European Commission has confirmed it has opened a formal investigation into Microsoft’s alleged anti-competitive practices relating to the bundling of Teams into Microsoft 365 services.
The issue stems from a three-year-old complaint by rival company Slack, alleging that Microsoft’s tying of the video conferencing app into its productivity suites is illegal.
Throughout the process, Microsoft has repeatedly told us that it “continue[d] to engage cooperatively with the Commission in its investigation and [has been] open to pragmatic solutions that address its concerns and serve customers well,” however that seemingly got Redmond nowhere.
Microsoft EU investigation
The European Commission confirmed on July 27 that the probe had commenced, citing concerns that Microsoft had been “abusing and defending its market position in productivity software by restricting competition” with a particular emphasis on the European Economic Area (EEA), which includes Iceland, Liechtenstein, Norway, and all of the other countries that make up the European Union.
The initial complaint stems from a period during which more companies were turning to cloud services following the effects of the pandemic. The Commission says that this transition “enabled the emergence of new market players and business models,” highlighting the possibility of multicloud and hybrid environments.
The “in-depth investigation” will be carried out “as a matter of priority,” says the Commission, though no further indication of timescales was provided. In the worst-case scenario (for Redmond), Microsoft may be found in breach of EU competition rules which prohibit the abuse of a dominant position – specifically, Article 102 of the TFEU.
Margrethe Vestager, Executive VP in charge of competition policy for the European Commission, said:
“We must therefore ensure that the markets for these products remain competitive, and companies are free to choose the products that best meet their needs. This is why we are investigating whether Microsoft’s tying of its productivity suites with Teams may be in breach of EU competition rules.”
Neither Microsoft nor Salesforce, the owner of Slack, responded to our email for comment on the confirmation of the formal investigation.