European Commission starts investigation into Microsoft Teams bundling

Margrethe Vestager, govt vice-president answerable for competitors coverage on the European Commission (EC), has mentioned it is going to begin a proper investigation to evaluate whether or not Teams and Microsoft 365 bundling is anti-competitive.

The investigation follows on from the July 2020 grievance made by Slack Technologies, which alleged that Microsoft illegally tied Teams to its dominant productiveness suites.

At the time, Jonathan Prince, vice-president of communications and coverage at Slack, mentioned: “This is way greater than Slack versus Microsoft – this can be a proxy for 2 very completely different philosophies for the way forward for digital ecosystems, gateways versus gatekeepers.

“Slack offers an open, flexible approach that compounds the threat to Microsoft because it is a gateway to innovative, best-in-class technology that competes with the rest of Microsoft’s stack and gives customers the freedom to build solutions that meet their needs. We want to be the 2% of your software budget that makes the other 98% more valuable; they [Microsoft] want 100% of your budget every time.”

Bundling of collaboration instruments with workplace productiveness software program could save organisations the price of operating two completely separate communications platforms. However, the European Commission is anxious that the bundling of such merchandise has long-term implications, because it reduces alternative for shoppers and enterprise customers.

The EC mentioned it was involved that Microsoft could grant Teams a distribution benefit by not giving prospects the choice to exclude it as a part of a subscription bundle to the corporate’s workplace productiveness suite. It additionally plans to take a look at the extent of interoperability between Microsoft’s productiveness suites and competing choices.

Given the shift to distant working throughout and for the reason that pandemic, Microsoft has established its Teams collaboration and video-conferencing software program as a key element in its cloud-based productiveness suite for enterprise prospects. The European Commission mentioned it was involved that Microsoft could also be abusing and defending its market place in productiveness software program by limiting competitors within the European Economic Area (EEA) for communication and collaboration merchandise.

The tying or bundling of Teams with the Microsoft Office suite could, in response to the fee, be stopping suppliers of different communication and collaboration instruments from competing, to the detriment of consumers within the EEA.

If confirmed, the behaviour underneath investigation could breach European Union competitors guidelines, which prohibit the abuse of a dominant place. The fee mentioned it could be finishing up its in-depth investigation as a matter of precedence. It has knowledgeable Microsoft and the competitors authorities of the member states that it has opened proceedings within the case.

“Remote communication and collaboration tools like Teams have become indispensable for many businesses in Europe,” mentioned the EC’s Vestager. “We must therefore ensure that the markets for these products remain competitive, and companies are free to choose the products that best meet their needs. This is why we are investigating whether Microsoft’s tying its productivity suites with Teams may be in breach of EU competition rules.”

In 2021, Salesforce completed its acquisition of Slack in a bid to ascertain itself in its place platform to Microsoft. At the time, Salesforce CEO Marc Benioff described the 2 comanies becoming a member of up as “the future of enterprise software”. 

Benioff’s plan is to supply companies a digital headquaters to allow them to ship buyer and worker success from anyplace, however this technique dangers being undermined if Microsoft Teams turns into established because the de facto normal for enterprise communications.