Microsoft Faces Potential Multi-Billion Dollar Fine Over Teams Bundling in EU

Microsoft is facing substantial antitrust charges from the European Commission, accused of illegally bundling its Teams app with its Office suite to gain an unfair market advantage over competitors such as Slack. This significant development marks the first major EU antitrust charge against Microsoft in nearly two decades.

The European Commission’s investigation was initiated by a 2020 complaint from Slack, now owned by Salesforce. Slack argued that Microsoft’s integration of Teams with Office 365 unfairly forced users to install Teams, thereby stifling competition in the market for workplace communication tools.

By including Teams with Office 365, Microsoft allegedly gained an unfair distribution advantage.Limitations that prevented competitors from effectively integrating with Microsoft’s products further disadvantaged rivals.

Margrethe Vestager, the EU’s competition chief, emphasized the necessity of maintaining competition in the remote communication and collaboration sector to foster innovation.

If Microsoft is found guilty, it could face a fine of up to 10% of its global annual revenue, which amounted to $211 billion in the last fiscal year. This could result in a fine totaling billions of dollars. Additionally, Microsoft may be required to implement further changes to its business practices to ensure fair competition.

Microsoft has expressed its commitment to resolving the Commission’s concerns. Microsoft President Brad Smith stated, “Having unbundled Teams and taken initial interoperability steps, we appreciate the additional clarity provided today and will work to find solutions to address the Commission’s remaining concerns.”