The European Union is reportedly planning to move forward with a formal complaint against the way Microsoft sells Teams, even though the company publicly announced in August it would start unbundling the collaboration app from Office and Microsoft 365 packages in Europe.
Under the proposed plan, Microsoft would separate out Teams and sell its 365 application suites to customers within in the EU for a discounted annual rate, starting October 1.
“These changes … are designed to address two concerns that are central to the Commission’s investigation: that customers should be able to choose a business suite without Teams at a price less than those with Teams included; and that we should do more to make interoperability easier between rival communication and collaboration solutions and Microsoft 365 and Office 365 suites,” Microsoft said in a blog post announcing the changes.
However, these changes have not done enough to satisfy regulators and the European Commission — the executive and regulatory branch of the EU — is now preparing a statement of objections to send to the company, according to a report from Bloomberg.
The European Commission said it had no comment to make on the matter, while Microsoft highlighted the proposal made by the company on August 31 when it announced the unbundling of Teams.
The original competition complaint was filed by team-chat software rival Slack in July 2020, alleging that Microsoft was engaging in the “illegal and anti-competitive practice of abusing its market dominance to extinguish competition in breach of European Union competition law” by tying its Teams product to the Office productivity suite, “force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers.”
Microsoft facing multiple EU regulatory investigations
The antitrust complaint isn’t the only EU investigation Microsoft is currently grappling with. The most recent regulatory point of contention in the region arose at the start of September, when Microsoft argued that its Bing search engine should not be regulated under the EU’s Digital Markets Act (DMA) legislation.
The DMA targets large companies —called "gatekeepers" — that provide “core platform services” and are most likely to enact unfair business practices. This includes companies with a market capitalisation of at least €75 billion ($81 billion) or sales in Europe of over €7.5 billion, at least 45 million monthly users in the EU, and which provide certain applications such as web browsers, virtual assistants, and messaging or social media services.
Microsoft contended that Bing should not be subject to the same regulatory obligations as its rival Google as it only has around a 3% market share. The company also voiced concerns that under the obligations placed on platforms by the DMA, Microsoft would be required to give users the choice of other search engines, which the company argues could offer a further boost in market share for Google.
The Commission has since published its list of gatekeepers, of which Microsoft has been designated one due to Windows PC OS meeting the criteria. However, Bing was not included in the list.
“The Commission has opened four market investigations to further assess Microsoft's… submissions arguing that, despite meeting the thresholds, some of [its] core platform services do not qualify as gateways,” the Commission said in a statement, adding that the investigation should be completed within a maximum of five months.
Regulators globally appear to be heeding concerns about what is perceived to be the increasing power of the world's biggest tech companies to use their dominant market positions to stifle competition. A headline-grabbing example of the trend happened this week, when the biggest US antitrust case of the century so far headed to trial, as the federal government and a group of state attorneys general challenge Google’s dominance in search.