The European Commission is once again coming after tech giant Microsoft, which has been accused of again violating European Union (EU) antitrust rules.
Brussels has accused Microsoft of anti-competitive behaviour for bundling its Teams app with its Office suite, in what is believed to be the first antitrust charge against the tech company in more than a decade.
The developments raise broader issues of market competition and fairness, business conduct and the strength of online competition, and point to continuing tensions between regulators and big tech companies. According to the investigation, in a public statement earlier this week, the European Commission accused Microsoft of using its dominant market position to favour its own services and engaging in anti-competitive behaviour.
In particular, the Commission alleges that Microsoft ties its Teams platform to other Office 365 products, arguing that this bundling is unfair to rival products, preventing other communications service providers from having a level playing field in the market and limiting competitive choice and innovation for consumers.
As the European Commission has revealed, Microsoft plans to more deeply integrate Teams with its flagship productivity software. However, this integration is a double-edged sword: while it benefits users, it also poses challenges for other communications service providers who need access to Microsoft’s vast ecosystem to deliver the same seamless experience.
The European Commission alleges that such practices violate competition law and are harmful to the integrity of digital markets more broadly. In a press release, the Commission said: “The Commission is concerned that since at least April 2019, Microsoft has linked Teams to its core SaaS productivity applications, thereby restricting competition in the market for communications and collaboration products and protecting its market position in productivity software and suite-centric models against competing individual software suppliers.”
The statement underlines the European Commission’s commitment to maintaining a competitive market environment, highlights the potential dangers that Microsoft’s practices pose to innovation and consumer well-being, and underscores the importance of regulatory intervention.
“In particular, the Commission is concerned that by not giving customers the option to obtain access to Teams when subscribing to its SaaS productivity applications, Microsoft may have given Teams a distribution advantage,” it added. “This advantage may have been exacerbated by limitations on interoperability between Teams’ competitors and Microsoft’s products. This conduct may have hindered Teams’ rivals from competing and innovating, to the harm of customers in the European Economic Area.”
Microsoft To the EU
Microsoft responded that it looks forward to working with the European Commission to address its concerns, given the Commission’s commitment to fair competition and innovation. “Now that we’ve unbundled Teams and taken initial steps on interoperability, we appreciate the further clarification provided today,” Brad Smith, Microsoft’s vice chairman and president, said in a statement on Tuesday.
Microsoft has been under antitrust investigation many times before. The company faced similar allegations, particularly in the late 1990s and early 2000s, over its Windows operating system. Historical context complicates the latest allegations, raising questions about whether Microsoft has learned any lessons from its past actions or continues to test the limits of fair competition.
Broader impacts
While the allegations against Microsoft refer to the actions of one company, they also point to larger concerns about the influence of tech giants in the digital economy. The competitive landscape for communications and collaboration tools is a fierce one, with industry leaders like Zoom, Slack and Microsoft vying for dominance.
Meanwhile, the impact of this case may establish important parameters for future regulatory frameworks for this type of market. It also clearly demonstrates that the tug-of-war between innovation and regulation continues. Technology companies argue that integrated ecosystems provide better services and foster innovation. But regulators have a responsibility to ensure that these ecosystems do not fall into the trap of monopoly, stifling competition and negatively impacting consumers.
Read more: The decades-long battle continues: Microsoft faces new antitrust charges in EU over Teams app
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