Microsoft (MSFT.O) was hit with an EU antitrust complaint by German rival Alfaview on Thursday, the second over its bundling of video app Teams into its Office product. Regulators are already preparing to investigate the move, which will put additional scrutiny on a company that has long faced antitrust probes.
A formal antitrust probe could lead to a fine and the possibility of splitting up some of the world’s most widely used enterprise software products. It would also mark the return of formal EU antitrust scrutiny for Microsoft, more than a decade after it settled a multi-billion dollar lawsuit with regulators over its use of near-monopoly power in the computer operating systems and desktop software market.
In the past, regulators have imposed billions of euros in fines on Microsoft for various antitrust violations. In 2004, for instance, the European Union slapped Microsoft with its most significant fine for abusing a dominant position in desktop operating systems and trying to crush competition in digital media players and low-end server computers.
The latest complaint against Microsoft will likely focus on how the company uses its dominance in the desktop operating system to push other products like Teams, the workplace messaging platform that has grown into a significant competitor to Slack and which Microsoft bundles with Office. According to the German competitor’s lawyers, the tying of the two apps may violate European laws prohibiting the tying or bundling of different products to prevent abuse of dominant positions.
It needs to be clarified whether the latest case against Microsoft will result in a fine. Still, the move could herald more intense scrutiny of MSFT from Brussels as it enacts its new digital marketplace law, the Digital Markets Act. The legislation will restrict what is known as platform “gatekeepers” that include web browsers, cloud computing services, virtual assistants, and others to limit their power over other players in the market.
Until now, Microsoft has gotten away with using its power as one of the most widely used productivity suites to promote its newer products, like Teams and Azure, the company’s public cloud service. The threat of a formal antitrust probe has finally brought those powers into the spotlight, and the EU’s competition enforcers are ready to take action.
The tying of Microsoft Teams to Office has been a central sticking point for Slack, which complained in 2020 that the U.S. company violated EU competition rules by tying its business communication software with the more popular productivity suite. Despite ongoing talks, Microsoft has yet to agree to unbundle the two programs from each other in Europe, and it remains to be seen whether it will be enough to avoid a full antitrust investigation. In the meantime, the threat of a full antitrust probe has already brought change to the company. That change will likely continue as it tries to appease competitors and EU competition authorities.
