Big Tech’s bundling dilemma: Microsoft’s Teams in the EU Crosshairs

In particular, the Commission points to Microsoft's tie-in of its Teams platform to other Office 365 products in a way that it says is unfair to competing offerings. Photo: Unsplash/Windows

Big Tech’s bundling dilemma: Microsoft’s Teams in the EU Crosshairs Dashveenjit is an experienced tech and business journalist with a determination to find and produce stories for online and print daily. She is also an experienced parliament reporter with occasional pursuits in the lifestyle and art industries.

The European Commission is back to breathing down the neck of Microsoft, the latest big tech firm accused of once again breaking the European Union (EU) antitrust law.

Brussels has accused Microsoft of anti-competitive conduct by bundling its Teams app with the Office suite in what is thought to be the first antitrust charges made against the tech group in over a decade. 

The development illustrates the ongoing tension between regulators and Big Tech as it raises broader questions about market competition and fairness, corporate behaviour and the momentum in online competition. In an official statement earlier this week, according to their investigation, the European Commission accused Microsoft of engaging in anti-competitive practices by leveraging its dominant position in the market to favour its own services.

In particular, the Commission points to Microsoft’s tie-in of its Teams platform to other Office 365 products in a way that it says is unfair to competing offerings. The bundling is said to stifle other communication service providers from having a fair shot at the market, curtailing competitive choice and innovation for consumers.

As revealed by the European Commission, Microsoft plans to integrate Teams with its staple productivity software more deeply. However, this integration is a double-edged sword; it benefits users while posing a challenge for other communication service providers who need access to Microsoft’s vast ecosystem to provide comparable seamless experiences. 

The Commission argues that such practices violate competition law and are more broadly harmful to the health of the digital market. In the press release, the European Commission stated: “The Commission is concerned that, since at least April 2019, Microsoft has been tying Teams with its core SaaS productivity applications, thereby restricting competition on the market for communication and collaboration products and defending its market position in productivity software and its suites-centric model from competing suppliers of individual software.”

The statement highlights the Commission’s commitment to upholding a competitive market landscape. It also highlights the possible dangers that Microsoft’s practices could have on innovation and consumer well-being, underscoring the importance of regulatory intervention.

“In particular, the Commission is concerned that Microsoft may have granted Teams a distribution advantage by not giving customers the choice to acquire access to Teams when they subscribe to their SaaS productivity applications,” it added. “This advantage may have been further exacerbated by interoperability limitations between Teams’ competitors and Microsoft’s offerings. The conduct may have prevented Teams’ rivals from competing and innovating to the detriment of customers in the European Economic Area.”

Microsoft to EU

Microsoft has responded that it looks forward to working with the European Commission to address its concerns, as the latter is committed to fair competition and innovation. “Having unbundled Teams and taken initial interoperability steps, we appreciate the additional clarity provided today,” Microsoft’s vice chair and president, Brad Smith, said in a statement Tuesday. 

Microsoft is no stranger to antitrust scrutiny. The company has faced similar charges in the past, particularly during the late 1990s and early 2000s, regarding its Windows operating system. The historical context brings intricacy to the current charges, prompting inquiries into whether Microsoft has gained any insights from its previous actions or if it persists in testing the limits of fair competition.

The broader implications

While the charges against Microsoft refer to a single company’s behaviour, they also point to considerable worries over the sheer clout of technology behemoths in the digital economy. The competitive landscape of communication and collaboration tools is fiercely contested as industry leaders such as Zoom, Slack, and Microsoft vie for supremacy. 

On the other hand, the repercussions of this case could establish critical parameters for future regulatory frameworks of these types of markets. This case also starkly illustrates the ongoing tug-of-war between innovation and regulation. Tech companies assert that their integrated ecosystems offer superior services and foster innovation. However, regulators are responsible for ensuring that these ecosystems do not turn into monopolistic traps that stifle competition and negatively impact consumers. 

See more: Decades-long battle continues: Microsoft faces new EU antitrust charges over Teams app

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