Microsoft Teams Bundling May Have Violated Antitrust Law, EU Says

The European Commission on Tuesday said Microsoft (MSFT) may have violated European Union (EU) antitrust rules by bundling Teams with its other Office products, giving it an unfair advantage over competing services.

The news comes just a day after the Commission accused Apple (AAPL) of violating the Digital Markets Act (DMA), which went into effect earlier this year and was passed to curb the power of tech “gatekeepers” including Apple, Microsoft, Meta (META), Alphabet (GOOGL), Amazon (AMZN), and TikTok parent ByteDance. The Commission has opened investigations into a number of the companies over issues with consumer choice and data.

Bundling Teams May Have Given Microsoft ‘Distribution Advantage’

The Commission said Tuesday that Microsoft’s practice of bundling Teams with other products in packages like Office 365, which includes popular programs like Microsoft Word and Excel, may have given Teams an unfair “distribution advantage” over similar workplace collaboration products.

Last year, Microsoft took action to start offering Teams as a standalone product companies could subscribe to without a larger bundle, but the Commission said Tuesday that it does not believe those changes went far enough. The company also made the move to unbundle Teams from the rest of the Office suite globally in April.

“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,” Microsoft Vice Chair and President Brad Smith said in a statement shared with Investopedia.

EU Opened Investigation After Receiving Complaints Last July

The Commission said it opened the investigation after receiving a pair of complaints in July 2023 from Slack Technologies, which is now owned by Salesforce (CRM), and alfaview GmbH.

Microsoft has officially been sent the Commission’s “statement of objections,” and now has the opportunity to review the issues raised, provide a written response, or request an oral hearing to provide the Commission with more information. The Commission said it doesn’t have a deadline for its investigation, and Microsoft could face “a fine of up to 10% of the company’s annual worldwide turnover” if the Teams-related conduct is found to be anticompetitive.

Microsoft shares, which are up nearly 19% so far this year through Monday’s closing level of $447.67, are little changed in premarket trading Tuesday.