EU accuses Microsoft of antitrust violations over Teams

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Brussels has accused Microsoft of anti-competitive behavior by bundling its Teams app with its Office suite, in the first such antitrust accusations brought against the tech group in more than a decade.

The European Commission on Tuesday handed the world’s most valuable state-owned company an indictment citing concerns that Microsoft gave video conferencing app Teams an “unfair advantage,” harming rivals like as Slack and Zoom.

The accusations are the most significant that Brussels has made against Microsoft, apart from merger control, since the group’s confrontation with the United States and the European Union over Windows, which began more than 20 years ago. This landmark case also centered on the bundling, or “tying,” by Microsoft of its various software products.

This latest case follows a bitter battle with regulators over Microsoft’s $75 billion acquisition of Activision Blizzard last year and comes as the company faces scrutiny over its alliances with artificial intelligence start-ups, including OpenAI.

“We are concerned that Microsoft is giving its own Teams communications product an unfair advantage over competitors by tying it to its popular productivity suites for businesses,” said Margrethe Vestager, EU executive vice-president for competition policy. “If confirmed, Microsoft’s conduct would be illegal under our competition rules. Microsoft now has the opportunity to address our concerns.

In April, Microsoft issued concessions aimed at trying to avoid regulatory action, including expanding its plans to unbundle Teams from other software such as Office beyond Europe. However, officials do not believe this measure goes far enough to allow competition in the market.

Reacting to the new accusations, Brad Smith, President of Microsoft, said: “Having unbundled Teams and taking the first interoperability steps, we appreciate the additional clarity provided today and will work to find solutions to address the concerns remaining of the Commission.

Brussels said new accusations did not “prejudge the outcome” of the investigation. Microsoft is seeking to settle the case to avoid formal charges of violating the law and a potential fine of up to 10 percent of its annual worldwide revenue, according to sources familiar with the company’s reasoning.

The move comes as Microsoft faces increased scrutiny of its activities. Regulators are examining the company over its $13 billion partnership with OpenAI and Brussels is considering launching a full investigation. The group also faces a complaint over what some competitors say are unfair licensing deals for cloud computing.

Brussels is also looking to other big tech companies. The European Commission, the EU’s executive body, on Monday accused Apple of stifling competition on its App Store, marking the first time EU regulators have taken action against a major tech group under new digital rules .