The European Commission notified Microsoft on Tuesday that it has come to the preliminary conclusion that the company violated EU antitrust rules by bundling Teams within its suites of business applications. The investigation against the US company is ongoing.
Microsoft’s practices are alleged to have breached Article 102 of the Treaty on the Functioning of the European Union and Article 54 of the European Economic Area Agreement. These articles prohibit companies from abusing a dominant position in the market through practices that discourage fair competition.
The Commission stated that it is concerned that Microsoft has given Teams a “distribution advantage by not giving customers the choice whether or not to acquire access to Teams when they subscribe” to Microsoft’s suites of cloud based applications. This distribution advantage is alleged to be unfair because of Microsoft’s dominant position in the market.
The investigation into Teams was initiated in 2020, when Slack Technologies filed an anticompetitive behavior complaint with the Commission. The Commission is authorized by Council Regulation 1/2003 to order behavioral or structural remedies, and to impose both fines and penalty payments for breaches of EU competition rules.
In previous cases that are similar, the Commission will typically reserve fines for non-compliance with a Commission ruling. For example, in 2008, Microsoft was fined €899M for not complying with a previous Commission antitrust ruling regarding its licensing practices.
The Commission opened proceedings against Microsoft for its practices relating to the distribution of Teams in 2023. In reaction, Microsoft altered the way it distributed Teams by offering some software bundles that did not include the application. In Tuesday’s statement, the Commission announced that it had come to the preliminary conclusion that “these changes are insufficient to address its concerns and that more changes to Microsoft’s conduct are necessary to restore competition”.
The announcement comes one day after the European Commission informed Apple that it preliminarily found App Store Rules to be in breach of the Digital Markets Act (DMA).