How Microsoft avoided hefty fine in an EU antitrust case
What's the story
Microsoft has avoided a hefty fine from the European Commission after being accused of antitrust violations. The company was charged with bundling its Teams app with Office 365 and Microsoft 365 subscriptions. However, the European Commission has now accepted Microsoft's commitments to address these concerns, stemming from an anti-competitive complaint filed by Slack in July 2020. The EU investigation began in July 2023.
Action plan
Microsoft's commitments to address competition concerns
The European Commission noted that Microsoft's commitments deal with the tying of Teams to its popular productivity apps. These include the Word, Excel, PowerPoint, and Outlook in Office 365 and Microsoft 365 suites for business customers. As part of these commitments, Microsoft has agreed to offer versions of its Office suites without Teams at a reduced price, and let long-term license customers switch to suites without Teams.
Enhanced features
Interoperability with competing tools
Along with the above commitments, Microsoft has also promised interoperability for key functions between communication and collaboration tools competing with Teams and certain Microsoft products. The company will also permit customers to move their data out of Teams, making it easier for them to use competing solutions. Most of these commitments will be enforced by EU lawmakers for seven years, while the ones related to interoperability and data portability will be in force for 10 years.
Market impact
Here's what the European Commission said
Teresa Ribera, the Executive Vice President for Clean, Just and Competitive Transition at the European Commission, said that organizations across Europe rely on videoconferencing, chat and collaboration tools. She added that today's decision opens up competition in this crucial market. It ensures that businesses can freely choose the communication and collaboration product best suited to their needs.
Investigation
Why EU opened an investigation
The EU first began an antitrust investigation into Microsoft in July 2023, after a complaint by Salesforce-owned Slack. The latter owns a rival chat service to Teams. Slack had accused Microsoft of "illegally tying" its Teams product to Office and force installing it for millions of users, blocking its removal, and also hiding the true cost to enterprise customers.