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Just one day after the European Union’s regulatory arm took aim at Apple, it’s going after Microsoft over its tie-up of the Teams and Office products.
The European Commission on Tuesday said its preliminary investigation had determined that Microsoft breached the 27-member bloc’s antitrust rules by abusing its position in the market for productivity software. The regulators argue that by including Teams in the Microsoft 365 suite — even if consumers don’t have a plan for the service — or by providing a free one-year trial in the Office 365 service, Microsoft is hurting competition.
By offering its suites with Teams included, the Commission says Microsoft may have given itself a “distribution advantage” that removes incentives for consumers to look for other options. The regulator added that it’s concerned that limitations on how Microsoft’s products work with Teams’ competitors added to the company’s advantage.
“We are concerned that Microsoft may be giving its own communication product Teams an undue advantage over competitors, by tying it to its popular productivity suites for businesses,” Margrethe Vestager, who oversees competition policy for the Commission, said in a statement. “And preserving competition for remote communication and collaboration tools is essential as it also fosters innovation on these markets.”
In a statement, Microsoft pointed to changes it had made after the Commission opened its inquiry last July, such as offering some suites without including Teams. However, regulators say its changes are “insufficient” and that additional adjustments are necessary.
“Having unbundled Teams and taken initial interoperability steps, we appreciate the additional clarity provided today and will work to find solutions to address the Commission‘s remaining concerns.” Microsoft Vice Chair and President Brad Smith said in a statement.
The Commission’s inquiry began after it received complaints from Slack Technologies — which has since been acquired by Salesforce — and German video conference software provider Alfaview. In a statement Tuesday, Alfaview CEO Niko Fostiropoulos called Microsoft’s previous efforts “insufficient in many respects.”
The Commission’s move Tuesday, formally called a statement of objections, represents its preliminary findings. The regulator has no deadline to complete its inquiry, which could end with fines of up to 10% of Microsoft’s annual turnover.