EU Commission Says Microsoft Bundling Teams With Office 365 Breached Antitrust Rules

The European Commission accused Microsoft today of violating antitrust rules by bundling Microsoft Teams with its Office 365 and Microsoft 365 commercial plans. In its preliminary findings, the EU regulator explained that the way Microsoft has been tying the distribution of Teams with its dominant productivity apps may have prevented Teams’ alternatives such as Slack and Zoom from competing on a fair ground.

“In particular, the Commission is concerned that Microsoft may have granted Teams a distribution advantage by not giving customers the choice whether or not to acquire access to Teams when they subscribe to their SaaS productivity applications,” the EU Commission’s press release reads. “This advantage may have been further exacerbated by interoperability limitations between Teams’ competitors and Microsoft’s offerings. The conduct may have prevented Teams’ rivals from competing, and in turn innovating, to the detriment of customers in the European Economic Area.”

The EU Commission started investigating Microsoft’s Teams/Office 365 bundling practices back in July 2023 following a formal antitrust complaint from Slack in 2020. At the time, the company now owned by Salesforce accused Microsoft of doing “a carbon copy of their illegal behavior during the ‘browser wars’.”

This is indeed not the first time that Microsoft has been accused of violating antitrust rules. This time, however, the company Microsoft tried to address the concerns of the EU Commission by unbundling Teams from its Office 365/Microsoft 365 commercial plans globally. But that wasn’t enough to stop the investigation.

“The Commission preliminarily finds that these changes are insufficient to address its concerns and that more changes to Microsoft’s conduct are necessary to restore competition,” the EU regulator said today. Microsoft can now respond to the Commission’s Statement of Objections in writing and request an oral hearing. However, if the company fails to prove that it didn’t breach EU antitrust rules, it could face a fine of up to 10% of the company’s annual worldwide turnover.

“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 President Brad Smith said in a statement shared with the Financial Times.

Microsoft isn’t the only company to be facing a massive antitrust fine. Yesterday, the EU Commission also accused Apple of breaching its Digital Markets Act, and the EU regulator also launched a new investigation into Apple’s new business terms for iOS apps in the EU