Microsoft faces EU antitrust lawsuit and large punishment with the Teams app

Microsoft faces EU antitrust lawsuit and large punishment with the Teams app
Microsoft faces EU antitrust lawsuit and large punishment with the Teams app

The European Commission has accused Microsoft of unfairly providing itself with an unfair advantage over rivals like Slack by unlawfully integrating its video and chat program Teams with its Office product.

The European Commission accused Microsoft (MSFT.O) of improperly connecting its chat and video software Teams with its Office product, giving it an unfair edge over competitors like Slack. As a result, Microsoft faces a substantial antitrust fine. The EU competition watchdog’s most recent move, which came over two decades after Microsoft’s last EU sanction, was prompted by a 2020 complaint from Salesforce-owned rival office messaging tool Slack. (CRM.N)

The European Commission, which oversees EU competition, claimed that teams had received a distribution edge and that competitors were further hampered by restrictions that prevented them from interacting with Microsoft’s products. EU antitrust commissioner Margrethe Vestager said in a statement, “Preserving competition for remote communication and collaboration tools is essential as it also fosters innovation on these markets.” Two decades ago, the US IT giant was fined 2.2 billion euros ($2.4 billion) by the EU for violating antitrust laws by tying together many products and other offenses. If found guilty of the most recent alleged antitrust violations, it might face fines equal to up to 10% of its annual global turnover.

The Commission said that more adjustments were required to restore competition and that Microsoft’s actions did not adequately address its concerns. According to people with direct knowledge of the situation, the EU enforcer wants the business to sell Office without Teams for less than what it has announced, while competitors want greater incentives for users to move to them and more transparent interoperability agreements. Brad Smith, President of Microsoft, restated remarks made earlier in the month regarding the company’s commitment to fixing the problem. “Having unbundled teams and taken initial interoperability steps, we appreciate the additional clarity provided today and will work to find solutions to address the Commission’s remaining concerns,” Smith stated.

In order to restore a free and fair choice, Salesforce President and Chief Legal Officer Sabastian Niles encouraged the Commission to take immediate action toward a binding and effective solution. Alfaview, a German competitor and complainant, likewise applauded the Commission’s accusation against Microsoft. In 2017, Teams was a free addition to Office 365, taking on the role of Skype for Business. Video conferencing contributed to its meteoric rise in popularity during the pandemic, but competitors said Microsoft had an unfair edge by combining its products. In an effort to allay EU antitrust worries, Microsoft split Teams from Office in April and made it simpler for competitors to use its products. However, insiders claimed that the unbundling was unlikely to satisfy the authorities.

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