Microsoft Faces EU Antitrust Charges Over Teams

The European Commission is preparing to file formal antitrust charges against Microsoft over its Teams videoconferencing and collaboration tool after the latest round of talks with the company failed, the Financial Times reported.

Last month the US’ most valuable listed tech company offered concessions seeking to avoid regulatory action, including an offer to unbundle Teams from software such as Office not just in the EU but globally, the paper reported.

EU officials are, however, concerned the offer does not go far enough to enable fair competition, the FT reported, citing unnamed sources.

The Commission is meeting with Microsoft competitors this week in a sign that it is planning to file formal charges, the report said.

Concessions

Microsoft may still offer further last-minute concessions of the Commission may decide to drop the case.

Competitors say Microsoft may give Teams greater compatibility with its own software over that of others and has set the pricing for Teams in such a way as to discourage the use of other options.

They say Teams also lacks data portability, making it difficult to switch to rivals.

The complaint dates from 2020 when Slack, now owned by Salesforce, said Microsoft was abusing its dominant position to stifle competition by adding Teams to Office 365 at no extra charge, a move it made in 2017.

Slack said at the time the move took unfair advantage of Microsoft’s dominance in productivity software.

‘Pragmatic solutions’

Microsoft began discussions with the European Commission in 2022 over remedies that could make a formal probe unnecessary, and reportedly offered to cut the price of Office when Teams was not included.

The Commission was seeking a steeper price cut than Microsoft was willing to offer, according to a report in July of last year.

Microsoft referred to an earlier statement that it would “continue to engage with the Commission, listen to concerns in the marketplace, and remain open to exploring pragmatic solutions that benefit both customers and developers in Europe”.

The company faces fines of up to 10 percent of its global turnover if found to have breached EU competition law.

Microsoft is also facing EU scrutiny over its relationship with ChatGPT maker OpenAI and has been designated a “gatekeeper” under new Digital Markets Act regulations, giving it special competition responsibilities.