Antitrust: The EU accuses Microsoft of violations on its Teams video app
The European Commission has informed Microsoft of its preliminary opinion that Microsoft has violated EU antitrust rules by tying up its communications and collaboration product Teams to its popular productivity applications included in its Office 365 and Microsoft 365 business suites.
Teams is a cloud-based communication and collaboration tool. It offers features like messaging, calling, video conferencing, and file sharing, and brings together workplace tools and other applications from Microsoft and third parties. Business application software vendors, including Microsoft, are increasingly delivering this software as software as a service (“SaaS”), which is software hosted on cloud infrastructures of the vendor’s choice. In principle, cloud computing allows new market entrants to offer SaaS solutions and customers to use various software from different providers. However, Microsoft has a suite-centric business model that combines multiple types of software into a single offering. When Teams launched, Microsoft included it in its widely used cloud-based productivity suites for Office 365 and Microsoft 365 enterprise customers. The Commission preliminarily notes that Microsoft is dominant globally in the market for SaaS productivity applications for professional use – we read in a note from the EU Executive -.
The Commission is concerned that, since at least April 2019, Microsoft has tied Teams to its main SaaS productivity applications, thus limiting competition on the communications products market and collaboration and defending its market position in productivity software and its suite-centric model from competing individual software vendors.
In particular, the Commission is concerned that Microsoft may have gave Teams a distribution advantage by not giving customers the choice of whether or not to gain access to Teams when they subscribe to their SaaS productivity applications. This advantage may have been further exacerbated by interoperability limitations between Teams’ competitors and Microsoft’s offerings.
The conduct may have prevented Teams’ rivals from competing and, in turn, innovating, to the detriment of customers in the European Economic Area. If confirmed, these practices would violate Article 102 of the Treaty on the Functioning of the European Union, which prohibits the abuse of a dominant market position. After the Commission initiated proceedings in July 2023, Microsoft introduced changes to the way it distributes Teams. Notably, Microsoft has started offering some suites without Teams. The Commission preliminarily believes that these changes are not sufficient to address its concerns and that further changes to Microsoft’s conduct are necessary to restore competition. Sending a statement of objections does not prejudge the outcome of an investigation.
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