UNITED STATES: The European Union (EU) has initiated an antitrust investigation against technology giant Microsoft, based on a formal complaint lodged by Slack, the renowned workplace collaboration app. Slack accuses Microsoft of engaging in unlawful practices to stifle competition by bundling its rival app, Teams, with its widely-used enterprise suite, Office 365.
The origins of the complaint trace back to 2017, when Microsoft made a significant move by offering Teams as a free addition to its Office 365 productivity suite. Slack contends that this move was an attempt to unfairly tie its competitor’s product to its dominant software suite, forcing millions of users to adopt Teams without the option of removing it. Moreover, Slack alleges that Microsoft concealed the true costs of Teams from enterprise customers, resulting in what they claim is an anticompetitive advantage.
The EU antitrust regulators took the complaint seriously, leading to an in-depth investigation into Microsoft’s business practices. The key point of contention revolves around Microsoft’s offer to create a more affordable version of Office 365 without Teams. While the tech giant proposed this solution, the EU’s antitrust watchdog believes the discount offered is inadequate and has demanded a more substantial price cut. The goal is to establish a fairer playing field by encouraging a more pronounced price differentiation between Office 365 with Teams and the version without it.
In response to the investigation, Microsoft has expressed willingness to cooperate with the EU Commission to address its concerns. The company continues to cooperate with the Commission in its inquiry, and a spokeswoman said, “We are open to practical solutions that address its concerns and serve customers well.”
This antitrust probe is bound to have far-reaching implications for the technology industry, given Microsoft’s substantial market share and influence in both productivity software and enterprise communication tools. The EU Commission’s efforts are aimed at ensuring fair competition and preventing dominant players from leveraging their market power to restrict competition and stifle innovation.
Slack, now owned by Salesforce, has been vocal about its pursuit of a level playing field. In 2020, the company stated to the media that Microsoft’s actions amounted to an illegal tying of Teams to its market-dominant Office productivity suite. They accused Microsoft of deploying aggressive tactics to entrench Teams in the corporate ecosystem.
The outcome of this investigation could potentially result in significant changes to how Microsoft packages and sells its Office 365 suite, impacting millions of enterprise customers across the EU. It remains to be seen how the tech giant will address the EU’s demands and whether further legal actions or sanctions will be taken by the EU Commission if anticompetitive practices are proven.
As this case unfolds, industry experts, customers, and competitors alike are closely watching to see how the EU antitrust investigation will shape the future of digital collaboration and productivity tools within the European market. Updates and developments on this matter are anticipated in the coming weeks as the investigation progresses.