Microsoft Facing EU Antitrust Investigation for Bundling Teams with Office

Microsoft’s Office suite may soon face scrutiny from the European Union (EU), as the bloc’s competition watchdog is reportedly considering launching an antitrust investigation into the software giant. According to a report by ReutersEU is concerned that Microsoft is using its dominant position in the productivity software market to push its cloud services to customers, making it difficult for them to switch to other providers.

The investigation was the result of a complaint filed by Slack which is owned by Salesforce in 2020. Slack alleged that Microsoft Teams’ bundling with Office gave the company an unfair advantage in the market for collaboration software.

The EC has been investigating complaints for the past two years. In recent months, the two companies have held discussions about potential solutions to the European Commission problem. However, these discussions hit a snag, and the EC is now likely to open a formal antitrust investigation.

If the European Commission finds that Microsoft has violated antitrust laws, the company could be fined up to 10% of its global annual revenue. In April, Microsoft said it would separate Teams from Office in the EU, essentially selling the two products separately. It is not clear whether the concessions will be enough to appease regulators.

Increasing Pressure on Microsoft’s Cloud Business Practices

The report, which cites unnamed sources familiar with the matter, claims that the EU has received complaints from several Microsoft Competitors, who allege that the company is tying its cloud products, such as OneDrive, SharePoint, and Teams, to its popular Office applications, such as Word, Excel, PowerPoint and Outlook. This can have a lock-in effect for customers, who may find it difficult to migrate their data and workflows to alternative cloud platforms.

The European Union is also reportedly concerned about Microsoft’s data collection practices, and whether they comply with strict block privacy regulations, such as General Data Protection Regulation (GDPR). The report indicates that the EU is investigating how Microsoft handles the personal data of its Office users, and whether it gives them sufficient control and transparency over their data.

In May, the European Commission opened an investigation into Microsoft’s Azure cloud business. The investigation comes amid growing concerns that the US tech giant is leveraging its market power to outperform its rivals.

The European Commission’s investigation focused on two main areas:

Is Microsoft using its dominant position in the operating system market to give its Azure cloud business an unfair advantage. Is Microsoft using its relationship with big customers to lock them into its Azure cloud platform.

Regulators want to know if Microsoft is locking up its customers and competitors by making it more difficult for them to access and use their own data on its cloud platform. They will also investigate whether Microsoft is forcing its customers to sign contracts that prevent them from moving and sharing data across various cloud services.