On 25th June 2024, the European Commission sent a Statement of Objections (SO) to Microsoft, explaining its considerations about some potential abusive practices related to the Microsoft’s collaboration software, Teams.
Microsoft, an American technology company, focuses on developing business software, cloud services, and personal computers. Teams is a cloud-based collaboration software offering business messaging, calling, video meetings and other services.
The SO was issued as part of an investigation started by the Commission in July 2023, after receiving a complaint by Slack Technologies, a messaging company and competitor of Teams. The complaint alleged that Microsoft was bundling its Teams product with its market-dominant productivity suites, Office 365 and Microsoft 365. In principle, business software suppliers, like Microsoft, are allowed to offer software as a service (SaaS) on their own cloud platforms. This helps new companies to provide SaaS solutions and customers to use different software from various providers. However, Microsoft has a suite-centric business model combining multiple types of software in a single offering and this drawn the attention of the Commission. According to the Commission, this practice may give Teams an unfair advantage over competitors by leveraging Microsoft’s popular productivity suites for businesses, limiting competition and innovation, and harming consumers.
If confirmed, these bundling practices would violate Article 102 of the Treaty on the Functioning of the European Union, which prohibits the abuse of a dominant market position by undertakings, as Microsoft has a dominant position globally in the market for SaaS productivity applications for professional use. Additionally, if Microsoft is found guilty of antitrust violations, it would face a fine up to 10 percent of its annual global turnover. The European Commission may also impose remedies requiring Microsoft to modify its products, similar to what happened in past actions. In fact, this may be the first time in 15 years that Microsoft faces antitrust charges from the European Commission, following two major cases regarding the bundling of Windows Media Player and Internet Explorer.
Nevertheless, after the issue of the statement of objections concerning the bundling of Teams, Microsoft still has the opportunity to reply and submit its comments on the investigation. Therefore, we must wait for the Commission’s final decision.
For the news published by the European Commission visit this link.
