Microsoft Corp.’s plan to unbundle Teams from its flagship Office offerings in Europe has not allayed the antitrust concerns of competition regulators in Luxemburg. The European Commission is now preparing a formal complaint against the company, according to Bloomberg.
Concerns were initially brought to the EC’s attention by competitor Slack Technologies, Inc. in July 2020, which charged Microsoft with abusing its dominance to extinguish competition. Slack’s general counsel said at the time that Microsoft had created a “weak, copycat product” then tied it to Office, forcing its installation and blocking its removal. This is what Microsoft did during the “browser wars,” he added.
Three years later in July of this year, the EC opened its investigation. Underscoring the dominance of Office 365 and Microsoft 365, the Commission shared concerns that Microsoft may be giving Teams a “distribution advantage” by forcing it on customers and limiting interoperability with competing productivity services.
Hoping to appease qualms that its practices may constitute anticompetitive tying or bundling – harming customers in the European Economic Area (EEA) – Microsoft announced it was untethering Teams from Office in the region plus Switzerland. The company said on Aug. 31, 2023, that, instead of bundling, it would sell 365 without Teams at a lower price and improve interoperability with products like Zoom and Salesforce, which acquired Slack in July 2021.
But, according to Bloomberg, the regional unbundling tactic “fell flat” with the EC, whose enforcers are preparing a complaint.
The news outlet noted two other complaints against Microsoft in the EU.
In November of 2022, Cloud Infrastructure Service Providers in Europe (CISPE) announced it was filing a formal complaint against Microsoft with the EC competition regulators for alleged unfair licensing practices. CISPE joined two of its members, OVHcloud and Aruba, who brought the same allegations against Microsoft. The trade group represents dozens of companies, including Amazon.
In November 2021 a coalition of EU software and cloud businesses joined Germany’s Nextcloud GmbH in a complaint to the EC over Microsoft’s alleged anti-competitive behavior with respect to its OneDrive cloud service. Microsoft is bundling OneDrive, Teams, and other services with Windows and “aggressively pushing consumers to sign up and hand over their data to Microsoft,” the charges maintain. A complaint also was filed with German antitrust authorities.
More recently, on Sept. 6, Microsoft found itself on a list of companies the EC has designated as operators of “gatekeepers” as defined by the Digital Markets Act (DMA). This means Microsoft and the other companies have to demonstrate they are not abusing the power of their gateway platforms to harm competitors and business customers. See separate post.