European Commission investigates possible anticompetitive practices by Microsoft regarding Teams

July 28, 2023

The European Commission has opened a formal investigation to assess whether Microsoft may have breached UK competition rules by tying or bundling its communication and collaboration product Teams to its popular suites for businesses: Office 365 and Microsoft 365.

Microsoft is a global technology company offering productivity and business software, cloud computing and personal computing. Teams is a cloud-based communication and collaboration tool. It offers functionalities such as messaging, calling, video meetings, file sharing and brings together Microsoft’s and third-party workplace tools and other applications.

The European Commission has pointed out that the coronavirus outbreak accelerated a shift to remote working as well as businesses’ transition to the cloud and the adoption of cloud-based software for communication and collaboration. The transition to the cloud has enabled the emergence of new market players and business models offering customers the ability to use multiple types of software from different providers, without the need to maintain an in-house data centre. Cloud-based software, including the products under investigation, are typically distributed on a subscription basis.

Microsoft includes Teams in its well-entrenched cloud-based productivity suites for business customers Office 365 and Microsoft 365. The Commission is concerned that Microsoft may be abusing and defending its market position in productivity software by restricting competition in the EEA for communication and collaboration products.

In particular, the Commission is concerned that Microsoft may grant Teams a distribution advantage by not giving customers the choice about whether to include access to that products when they subscribe to their productivity suites and may have limited the interoperability between its productivity suites and competing offerings.

These practices may constitute anti-competitive, tying or bundling and prevent suppliers of other communication and collaboration tools from competing, to the detriment of customers in the EEA.

If proven, the behaviour under investigation may breach EU competition rules, which prohibit the abuse of a dominant position (Article 102 of the Treaty on the Functioning of the European Union).

The Commission will carry out its in-depth investigation as a matter of priority. The opening of a formal investigation does not prejudge its outcome. There is no legal deadline for bringing an antitrust investigation to an end. The duration of an antitrust investigation depends on several factors, including the complexity of the case, the extent to which the companies concerned cooperate with the Commission and the exercise of the rights of defence.