EU officials stated on Tuesday (June 25) that Microsoft bundling its Teams with its popular enterprise applications Office violates EU antitrust laws.
If confirmed, the preliminary results of the EU investigation could lead to Microsoft being fined up to 10% of its global revenue, which amounted to $211 billion in the previous fiscal year.
“The European Commission has informed Microsoft of its preliminary view that Microsoft, by bundling its communication and collaboration product Teams with popular productivity applications included in its enterprise Office 365 and Microsoft 365 suites, has violated EU antitrust rules,” the EU executive body said in a statement.
After Salesforce’s Slack filed a complaint in 2020, the EU started investigating Microsoft in July 2023, and the investigation is ongoing.
Slack, owned by Salesforce (CRM), offers a chat service that competes with Teams. Slack accuses Microsoft of automatically including Teams in its Office software, thus depriving Slack of the opportunity to compete fairly, giving Teams an unfair advantage.
The European Commission shares the same concerns. Margrethe Vestager, the EU’s Competition Commissioner, stated, “We are concerned that Microsoft bundling its communication product Teams with its popular enterprise productivity suite may give its products an unwarranted advantage in competition.”
“Maintaining competition in remote communication and collaboration tools is crucial as it also drives innovation in these markets. If confirmed, under our competition rules, Microsoft’s conduct would be illegal.”
Previously, Microsoft spun off Teams from Microsoft 365 last year to address EU antitrust concerns.
However, the European Commission mentioned in its statement on Tuesday that these changes were not enough to alleviate its concerns, stating, “Further changes to Microsoft’s conduct are necessary to restore competition.”
Just a day before this announcement, EU regulators accused Apple of violating the EU’s landmark Digital Markets Act, which came into effect in March, forcing major tech platforms to make significant adjustments.
Apple denies any wrongdoing, and if the accusations are proven, the company could also face substantial fines.
As a formal step in the EU Commission’s investigation process, the commission will issue a Statement of Objections to the relevant companies, outlining the issues they raise. These companies can then respond to the statement.
After the companies respond, if the Commission still finds them to be engaging in infringing behavior, they can prohibit the conduct and impose fines of up to 10% of their global total revenue.