Brussels claims that Microsoft is abusing its dominant position with Teams

The European Commission sent a “statement of objections” to Microsoft on June 25, detailing the IT giant's practices which it considers anti-competitive. It accuses it of occupying a dominant position globally in the market for SaaS productivity applications for professional use, due to abusive tying of its Teams application with its Office 365 and Microsoft 365 software suites.

“An unfair advantage compared to its competitors”

Advertisement

Since April 2019, Microsoft has linked Teams to its main software suites. For the European Commission, this strategy restricts competition in the SaaS market. Furthermore, it protects its position in the productivity software market and its software suite-based model, to the detriment of independent software vendors. “We are concerned that Microsoft could give its own Teams app an unfair advantage over competitors by tying it to its popular business suites.”declared Margrethe Vestager, vice-president in charge of competition, in a press release.

The Commission considers that this distribution advantage granted to Microsoft Teams prevented users subscribing to the Office 365 or Microsoft 365 software suite from choosing an alternative other than Microsoft Teams. The European body considers that this advantage could “be further aggravated by interoperability limitations” faced by Teams' competitors with Microsoft software.

Microsoft has started to uncouple Teams from Office

The “communication of grievances” is a formal step, which does not prejudge the outcome of the investigation. This procedure was opened in July 2023, following a complaint filed by the Slack platform. A second complaint was filed a few days later by the German publisher Alfaview, which also questioned this tied selling practice.

Advertisement

The European body now wants the IT giant to offer its Office suite without Teams at a lower price than what it had offered. Teams' competitors, for their part, insist on more transparency on interoperability conditions and easier adoption. Microsoft began unbundling Teams from Office last year in Europe, then globally in April. “We appreciate the additional clarity provided today and will work to find solutions to address the Commission's remaining concerns.”said Brad Smith, president of the firm.

A fine that could theoretically climb to $21 billion

Microsoft must now respond to the points raised by the European Commission and may request to be heard to provide its observations. If, after this stage, Brussels considers that the infringement is serious, the American group faces an obligation to review its commercial practices and a fine of up to 10% of its annual global turnover. In 2023, Microsoft generated global revenue of $211.9 billion.

Selected for you

Advertisement