Microsoft to face EU competition probe over Teams and Office bundling

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Microsoft will next week face its first formal EU antitrust probe in 15 years over claims the US tech giant is unfairly bundling its video conferencing app Teams with its popular Office software.

The move comes from the European Commission, the European Union’s executive body, after Microsoft’s concessions to assuage competition concerns proved insufficient, four people with direct knowledge of EU thinking said on Monday. . The two people said that once the investigation begins, Microsoft could face formal charges as early as autumn.

The commission’s decision to launch the investigation signals Brussels’ determination to crack down on practices by big tech companies that could stifle competition. Apple, Google and Meta are all facing investigations for alleged anti-competitive behavior.

In April, the Financial Times reported that after rival Slack complained in 2020 that the practice of “bundling” the two services together broke EU competition laws, Microsoft would allow its customers to automatically download services across their devices. Will stop forcing teams to set up.

But talks between the commission and Microsoft have stalled over whether the concessions will have an EU or wider geographic impact, these people said, adding that questions remain over the price Microsoft will charge Teams to ensure fair competition. .

People with knowledge of the matter said this week’s talks focused on ways to avoid a formal investigation, but added that it was “very unlikely” that Microsoft would avoid it.

“We will continue to cooperate with the Commission in its investigation and are open to workable solutions that will address its concerns and provide good customer service,” Microsoft said.

The commission provided “no specific comment”, and said it “continues to assess the complaint based on our standard procedures”.

The investigation comes amid mounting political pressure against Microsoft. Stéphanie Yon-Courtin, an MEP who has a leading role in tech discussions in Brussels, last week pressed the commission to force Microsoft to make concessions that would ease competition concerns.

“Three years after the (Slack) complaint was lodged, Microsoft’s dominant position in the market has increased, while the complainant is still waiting for meaningful progress in this case,” wrote the MEP, representing the political group Renew Europe. He pointed to data that showed Teams had created about 270 million users, while Slack had about 20 million users.

At the time of the complaint, Slack, which has since been acquired by Salesforce, asked EU regulators to move swiftly “to ensure that Microsoft products are not illegally transferred from one market to another by bundling or tying them together.” could not continue to take advantage of his power”.

The upcoming investigation is Microsoft’s first antitrust probe in Brussels since 2008. Brussels then accused the company of abusing its dominant position by forcing users to download its Internet Explorer browser, which came bundled with Windows.

Microsoft settled with the commission, giving users the option of choosing a browser. But in 2013, the EU fined Microsoft €561mn for failing to meet its commitment.