Microsoft in EU antitrust crosshairs over Teams, Office tying

[July 27, 2023]  By Foo Yun Chee and Sudip Kar-Gupta
 
BRUSSELS (Reuters) -Microsoft on Thursday found itself the target of an EU antitrust investigation over the tying of its chat and video app Teams with its Office product, putting it at risk of a hefty fine.  

The Microsoft sign is shown on top of the Microsoft Theatre in Los Angeles, California, U.S. October 19,2018. REUTERS/Mike Blake/File Photo

The U.S. tech giant has racked up 2.2 billion euros ($2.5 billion) in EU antitrust fines in the previous decade for practices in breach of EU competition rules, including tying or bundling two or more products together.

It has since then sought adopted a more conciliatory approach with the European Commission.

The European Commission's investigation followed a complaint by Salesforce-owned workspace messaging app Slack in 2020 and after the U.S. tech giant's offer of remedies failed to address the EU competition enforcer's concerns.

The EU competition enforcer said it was concerned that Microsoft may be abusing and defending its market position in productivity software by restricting competition in the European communication and collaboration products market.

"Remote communication and collaboration tools like Teams have become indispensable for many businesses in Europe. We must therefore ensure that the markets for these products remain competitive, and companies are free to choose the products that best meet their needs," EU antitrust chief Margrethe Vestager said in a statement.

A spokesperson for Microsoft said Microsoft would continue to co-operate with the European Commission and that the company remained committed to finding solutions to address the Commission's concerns.

Reuters reported earlier this month that the EU antitrust watchdog was set to open a probe after Microsoft declined to offer bigger price cuts on its Office without Teams.

The European Commission hopes a price differential between Office with Teams and Office without the app will ensure a level playing field with rivals and give consumers more choice, people familiar with the matter have told Reuters.

German rival alfaview last week filed a complaint similar to Slack's with the EU executive.

($1 = 0.8988 euros)

(Reporting by Foo Yun Chee;Editing by Sudip Kar-Gupta and David Evans)

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