EU takes aim at Microsoft Teams bundling, saying it stifles competition

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The European Union (EU) is accusing Microsoft of foul play after regulators charged the tech giant with unfairly bundling its popular Teams video conferencing software with its Office suite. This practice, the EU says, gives Teams an unfair advantage over competitors like Zoom and Slack.

The issue centers on how Microsoft packages Teams within its Office 365 and Microsoft 365 subscriptions, which include programs like Word, Excel, and Outlook. Regulators believe this bundling essentially forces companies to adopt Teams if they want those other widely used Microsoft programs. This, they argue, hurts competition by limiting customer choice.

This is just the latest chapter in the EU’s ongoing efforts to rein in the dominance of big tech companies. Just a day earlier, the EU went after Apple over its App Store policies. Other tech giants like Amazon, Google, Meta, TikTok, and an unnamed company (likely referring to Alphabet, Google’s parent company) are also under investigation for their business practices.

The Microsoft case stems back to the COVID-19 pandemic, when video conferencing tools like Teams, Zoom, and Slack became crucial for remote work. In 2020, Slack, now owned by Salesforce, filed a complaint with the EU, alleging that Microsoft’s bundling tactics were anti-competitive, sparking the investigation.

According to the EU, Microsoft has an unfair edge because it doesn’t give customers the option to choose whether they want Teams when purchasing other software. Additionally, rival video conferencing companies reportedly face difficulties ensuring their products work seamlessly with other Microsoft programs.

“This behavior could have prevented competitors from competing effectively and ultimately stifle innovation, harming customers in the process,” stated the European Commission, the EU’s executive branch leading the probe.

The charges are just the beginning of a lengthy process. Microsoft has the opportunity to respond to the complaint. However, if no agreement is reached, the company could face a hefty fine – up to 10% of its global annual revenue.

This situation has echoes of a past antitrust case against Microsoft. Decades ago, the U.S. Department of Justice took legal action over Microsoft bundling its Internet Explorer browser with the Windows operating system. That case was eventually settled.

Microsoft claims it has already taken steps to address the EU’s concerns. Last year, the company offered Teams as a standalone purchase, separate from its Office products.

“With the separation of Teams and the adoption of initial measures to ensure compatibility, we appreciate the Commission’s clarification today,” said Brad Smith, Microsoft’s president, in a statement. “We will continue working to find solutions that address the remaining concerns.”

However, the EU maintains that Microsoft’s efforts are “inadequate” and demands further changes to “restore fair competition,” without providing specifics on what those changes might entail.

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