Microsoft

Microsoft Corp., which has adroitly avoided Big Tech’s clashes with regulators the past few years, now finds itself the focus of antitrust charges in Europe.

The software behemoth faces a hefty fine of up to 10% of its annual revenue (more than $200 billion last year) after the European Commission on Tuesday accused it of illegally tying Teams, its video and chat app, with its productivity applications Office 365 and Microsoft 365, giving Microsoft an unfair competitive advantage over workspace messaging app Slack and others. The action was triggered by a 2020 complaint from Salesforce Inc., which owns Slack.

“We are concerned that Microsoft may be giving its own communication product Teams an undue advantage over competitors, by tying it to its popular productivity suites for businesses,” EU antitrust chief Margrethe Vestager said in a statement. “Preserving competition for remote communication and collaboration tools is essential as it also fosters innovation on these markets.”

Last year, Microsoft attempted to address EU concerns by offering European customers software packages without Teams, but the commission said they weren’t enough to “restore competition.”

Microsoft President Brad Smith, who has acted as a White Knight of sorts among tech giants the past few years while Alphabet Inc.’s Google, Meta Platforms Inc., Amazon.com Inc., and Apple Inc. took their lumps from the EU and U.S. regulators, issued a conciliatory statement.

“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,” Smith said.

Microsoft can formally respond to the accusations, which are technically called a statement of objections, before the EU reaches a final decision.

Microsoft has largely escaped the scrutiny of lawmakers for years following its historic clash with the Justice Department in the 1990s that ultimately ended in a legal draw. It applied lessons from that experience to adhere to the guardrails of U.S. and European law. Until this week.

A day before the Microsoft news, the commission claimed Apple ran afoul of the 27-nation bloc’s new digital competition rulebook, Digital Markets Act. It is the first company charged with violating DMA, a law passed in 2022 that forces the largest “online gatekeepers” to change business practices. (Apple counters its products are designed in the best interests of customers.)

Separately, in March, Apple was fined a whopping $1.95 billion by the EU on antitrust grounds for its App Store following a lawsuit by Spotify Technologies in 2019.

Meanwhile, U.S. regulators — who are relying on antiquated antitrust law — are ratcheting their own investigations against Google (Department of Justice), Apple (Justice), Amazon (Federal Trade Commission), and leading AI players Microsoft, Nvidia Corp. and OpenAI (FTC).

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