EU launches investigation into Microsoft’s bundling of Teams app, citing potential antitrust concerns

European Union regulators have initiated an antitrust investigation into Microsoft’s practice of bundling its video and chat app, Teams, with other Office products. The European Commission, the EU’s executive arm, believes that these practices may amount to anti-competitive behavior.

This marks the first antitrust investigation into Microsoft by the EU in over ten years. In a press release, the EU regulators expressed concerns that Microsoft is granting Teams a distribution advantage by not providing customers with the choice to include or exclude the product when subscribing to productivity suites. This lack of interoperability between Microsoft’s productivity suites and competing offerings could potentially hinder competition in the workplace messaging and video app space.

The European Commission added, “These practices may constitute anti-competitive tying or bundling and prevent suppliers of other communication and collaboration tools from competing.”

Microsoft 365, previously known as Office 365, is a set of workplace-geared software that includes apps like Word and Excel.

Antitrust investigations do not have a set completion deadline. If Microsoft is found to have violated EU competition rules, the company could face a fine of up to 10% of its total global annual turnover.

In 2020, Slack, a rival of Teams, filed a complaint with the EU, accusing Microsoft of illegally tying Teams to its dominant productivity packages, such as Microsoft 365. Slack, which is owned by Salesforce, argued that millions of users were forced to install Teams without the option to remove it.

A Microsoft spokesperson responded by stating, “We respect the European Commission’s work on this case and take our own responsibilities very seriously. We will continue to cooperate with the Commission and remain committed to finding solutions that will address its concerns.”

Microsoft previously faced an EU antitrust probe in 2009 for a similar case involving its web browser, Internet Explorer. The EU raised concerns about Microsoft’s tying of Internet Explorer to its Windows operating system. Microsoft offered remedies by providing Windows users with a choice of rival web browsers.

More recently, Microsoft’s proposed acquisition of Activision Blizzard for $69 billion underwent EU scrutiny, with concerns of competition distortion in the console and cloud gaming market. Microsoft offered remedies in this case as well, leading to the deal’s approval by regulators in May.

– CNBC’s Silvia Amaro and Ryan Browne contributed to this report.