EU launches antitrust probe into Microsoft's team bundling

The European Commission has initiated a new antitrust investigation against Microsoft. The Commission claims that the American corporation violated EU regulations by tying its Teams communication product to its popular productivity applications included in the Office 365 and Microsoft 365 business packages.

The EU targets the technology giant, which has software like Teams in its portfolio. Teams is a cloud-based tool for communication and organizing work, offering features such as messaging, calls, video conferences, and file sharing.

Providers of business application software, including Microsoft, are increasingly distributing this software as a cloud computing service (known as SaaS). Essentially, cloud computing allows new market players to offer SaaS solutions, and customers to use various programs from different providers.

However, as reported by the EC, Microsoft has a business model that combines many types of software into one offer. When Teams was launched, Microsoft included it in its widely-used cloud packages for business clients—Office 365 and Microsoft 365.

The EC is concerned that at least since April 2019, Microsoft has tied Teams to its core productivity SaaS applications, thus limiting competition in the communication and collaboration products market and defending its market position against other providers.

In the opinion of the EC, Microsoft might have given Teams a distributional advantage without giving customers a choice of whether they wanted access to Teams when subscribing to its productivity SaaS applications.

This advantage may have been further deepened by interoperability constraints between Teams competitors and Microsoft's offerings. Such behavior could have prevented Teams' rivals from competing and, consequently, innovating, to the detriment of customers, the EC believes.

After the EC initiated proceedings in July 2023, Microsoft changed how Teams is distributed. However, the EC has preliminarily determined that these changes are insufficient to address its concerns and has initiated a new proceeding.

EU law prohibits the abuse of a dominant position. If the EC finds sufficient evidence of a violation, it can impose a fine of up to 10 percent of the company's annual turnover in the global market.