EU opens antitrust probe into Microsoft over Teams bundling

European Union regulators on Thursday opened an antitrust investigation into Microsoft’s bundling of its video and chat app Teams with other Office products.

The European Commission, the EU’s executive arm, said that these practices may constitute anti-competitive behavior.

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It is the first antitrust investigation by the EU into Microsoft in over a decade.

“The Commission is concerned that Microsoft may grant Teams a distribution advantage by not giving customers the choice on whether or not to include access to that product when they subscribe to their productivity suites and may have limited the interoperability between its productivity suites and competing offerings,” the EU regulators said on Thursday in a press release.

In other words, the EU is concerned Microsoft is not giving customers the choice to not buy Teams when they subscribe to the company’s Office 365 product. In doing so, Microsoft might be stopping other companies from competing in the workplace messaging and video app space.

“These practices may constitute anti-competitive tying or bundling and prevent suppliers of other communication and collaboration tools from competing,” the Commission added.

Microsoft 365, previously known as Office 365, is Microsoft’s set of software which includes workplace-geared apps like Word and Excel.

Antitrust investigations do not have a self-imposed completion deadline. If Microsoft is found to be in breach of EU competition rules, the U.S. tech giant could face a fine of up to 10% of its total global annual turnover.

Concerns over Microsoft on competitiveness grounds were first raised in 2020, when Teams rival Slack submitted a complaint to the EU, in which it alleged the Redmond tech giant illegally tied Teams to its dominant productivity packages, such as Microsoft 365. Slack, which is owned by Salesforce, has said the move meant millions of users were forced to install Teams without the ability to remove it.

A Microsoft spokesperson said, “We respect the European Commission’s work on this case and take our own responsibilities very seriously. We will continue to cooperate with the Commission and remain committed to finding solutions that will address its concerns.”

Microsoft was last subjected to an EU antitrust probe in 2009, in a similar case over its former web browser Internet Explorer. The EU raised concerns that competition was distorted by Microsoft tying Internet Explorer to its Windows operating system. Microsoft offered remedies to the EU, committing to allow Windows users a choice of rival web browsers.

More recently, Microsoft’s proposed $69 billion acquisition of Activision Blizzard came under EU scrutiny, on grounds that the deal may distort competition in the console and cloud gaming market. Microsoft offered remedies to the EU in this case, leading to regulators approving the deal in May.

– CNBC’s Silvia Amaro and Ryan Browne contributed to this report.