Sarah Travers
In a significant development aimed at curbing the dominance of major tech companies, the European Union has singled out Microsoft for potential antitrust violations. At issue is Microsoft’s bundling of its Teams application with its widely used Office suite, a move criticized for potentially stifling competition and innovation in the business communication sector.
Preliminary findings from the European Commission suggest that Microsoft may have abused its market position to unfairly promote Teams over rival products. This practice involved automatically including Teams in its Office 365 and Microsoft 365 packages, making it challenging for competitors to gain traction in the market.
If these initial findings are substantiated, Microsoft could face a fine of up to 10% of its global annual revenue. With the company reporting $211 billion in revenue last fiscal year, the potential fine could exceed $21.1 billion. This regulatory action by the EU follows recent allegations against Apple for similar breaches under the Digital Markets Act.
The investigation into Microsoft’s practices was prompted nearly a year ago by a complaint from Slack, a cloud-based messaging platform now owned by Salesforce. Slack alleged that Microsoft’s bundling of Teams unfairly restricted competition, limiting consumer choice and innovation.
The Commission has pointed out that Microsoft’s bundling strategy not only pressured customers into adopting Teams but also may have bolstered its competitive advantage by limiting interoperability with other products. Such limitations could have hindered rivals’ ability to compete effectively, ultimately disadvantaging consumers who might have missed out on potentially innovative solutions.
In response to these concerns, Microsoft halted the bundling of Teams in Europe last year and extended this policy globally in April. However, the European Commission argues that further changes are necessary to fully restore fair competition in the market.
Meanwhile, Salesforce has expressed support for the EU’s findings, seeing them as a victory for consumer choice and as confirmation of the competitive disadvantages created by Microsoft’s previous practices with Teams.
This case marks another step in the EU’s broader strategy to rein in the power of Big Tech, underscoring its commitment to fostering fair competition and innovation in the digital marketplace across Europe. As regulatory scrutiny intensifies, these measures could significantly impact how major digital platforms provide and consumers access services globally.
