EC Sends Statement of Objections to Microsoft Regarding Teams

The European Commission has informed Microsoft of its preliminary view that the company has breached EU antitrust rules concerning Teams application. The EC said that Microsoft has broken the rules by tying Teams to its popular productivity applications.

Microsoft has a suite-centric business model combining multiple types of software in a single offering. When Teams was launched, the company included it in its widely used cloud-based productivity suites for business customers. The EC preliminarily found that Microsoft is dominant worldwide in the market for SaaS productivity applications for professional use.

The body is concerned that, since at least April 2019, Microsoft has been tying Teams with its core SaaS productivity applications, thereby restricting competition on the market for communication and collaboration products and defending its market position in productivity software and its suites-centric model from competing suppliers of individual software.

In particular, the Commission is concerned that Microsoft may have granted Teams a distribution advantage by not giving customers the choice of whether or not to acquire 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.

“We are concerned that Microsoft may be giving its own communication product Teams an undue advantage over competitors, by tying it to its popular productivity suites for businesses. Preserving competition for remote communication and collaboration tools is essential as it also fosters innovation in these markets. If confirmed, Microsoft’s conduct would be illegal under our competition rules. Microsoft now has the opportunity to reply to our concerns,“ said Margrethe Vestager, EC Executive Vice-President.

After the EC opened proceedings in July 2023, Microsoft introduced changes in the way it distributes Teams. The EC preliminarily found that these changes are insufficient to address its concerns and that more changes are necessary to restore competition. If the body concludes, after the company has exercised its rights of defense, that there is sufficient evidence of an infringement, it can adopt a decision prohibiting the conduct and imposing a fine of up to 10% of the company's annual worldwide turnover. The EC may also impose on the company any remedies which are proportionate to bring the infringement effectively to an end.