Microsoft unbundles Teams and Office globally to avoid antitrust fight

In July 2020, ' inclusion as part of the well-established and widely used Office suite drew a competition complaint from software rival Slack, now owned by Salesforce. The complaint alleged that Microsoft was engaging in the “illegal and anti-competitive practice of abusing its market dominance to extinguish competition in breach of European Union competition law” by “force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers.”

In response to that complaint and subsequent threat of action by EU regulators, Microsoft publicly announced in August it would start unbundling the collaboration app from Office and Microsoft 365 packages in the European Economic Area, which includes countries in the region such as Switzerland that are not part of the EU itself.

That didn't stop the EU from continuing to proceed with its investigation for a formal antitrust complaint against Microsoft, one that is expected to come within the next few months, according to Reuters.

Microsoft is no stranger to opening its coffers to pay EU antitrust fines, having already racked up 2.2 billion euros ($2.4 billion) in fines in the past decade for tying or bundling products together in a way that was deemed anticompetitive by regulators. If found guilty of antitrust in the case of Teams, the company risks a fine of as much as 10% of its global annual revenue.

Lip service or competitive concession?

At least one watchdog organization said that the forthcoming EU antitrust complaint and any that may follow will be warranted despite Microsoft's unbundling move. Separating out Teams from Office is not enough to address“the systemic problems caused by its anticompetitive software licensing policies,” according to a statement by the leader of the Coalition for Fair Software (CFSL).

“By simply extending the changes offered in Europe in August 2023, this announcement pays lip service to fair competition but leaves interoperability and licensing restrictions in place that prevent true customer choice,” CFSL Executive Director Ryan Triplette said in a statement.

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