The European Union continues to scrutinize tech giants, issuing a preliminary statement of objections to Microsoft (MSFT). The EU contends that the tech company may be violating antitrust regulations through its practice of bundling Microsoft Teams with other popular software offerings.
Yahoo Finance’s legal reporter Alexis Keenan discusses the aspects of Microsoft’s products that have raised red flags with EU regulators.
For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.
This post was written by Angel Smith.
Video Transcript
Other setback for big Tech in regards to regulations.
We’ve got the European Union, the Eu accusing Microsoft of bringing some antitrust rules with the bundling of its office software and teams products.
Yahoo Finance’s Alexis Keenan joining us now with those details.
Hey, Alexis.
Hi guys.
Yeah.
So right on the heels of this apple news that we got yesterday, um This is a similar statement by the European Commission.
So different facts here.
But the European Commission, the regulator in the in the Eu is issuing Microsoft a preliminary view.
That’s what it’s called.
It’s basically a charge.
It’s called also a statement of, of objections.
It all comes before a final decisions and what they claim is that Microsoft is bundling or tying its Microsoft teams product to other business software namely office 365 and Microsoft 365.
They say that’s a violation of eu antitrust rules and the market that they’ve identified is s a productivity apps for business.
So specifically in that business sector and we knew all the back in April that the E was planning to make a charge and these actual claims, these are these problems that Microsoft’s competitors have with this issue, go all the way back to 2020 when sales forces Slack complained that this was anti competitive.
So that then led Microsoft in 2023 in October last year to unbundle teams in office.
But the EU the EC says they didn’t go far enough Microsoft then spread that globally this year.
But now Microsoft is going to get a chance to respond to these claims.
But you know, the eu the process, it’s administrate, but it’s really different when the EU makes an antitrust claim against a company in the US, were familiar with the DOJ or the FTC, bringing a complaint going through a trial but perhaps going through negotiations, a lawsuit right in a court of law.
But in the case of the EC, it is the investigator, it’s the judge, it’s the jury and the lines can be very, very steep in the eu they are up to 10% of global revenues.
They can be up that high.
And for Microsoft in 2023 we’re talking about annual global revenues of 212 billion.
So if it were a violation were found and a fine that high was assessed, we would be talking about $21 billion.
So no small change.
So the EC taking its antitrust laws very seriously.
Here.
Once again, we’re seeing evidence of that.
In response, Microsoft has told Yahoo Finance that having bundled, having unbundled teams rather and take an initial interoperability steps.
We appreciate the additional clarity provided today and they say they will work to find solutions to address the ECs remaining concerns.
So Microsoft definitely saying they want to work it out here and for good reason, who knew teams would call such the hubbub.
All right, thanks so much Alexis for breaking this all down major implications potentially there for Microsoft.
For sure.
Here we’ll continue to track that.