The European Union (EU) has laid antitrust allegations against Microsoft, claiming that the tech conglomerate engaged in anticompetitive practices by incorporating its Teams app into its Office suite. The EU Commission presented the charges on Tuesday, citing Microsoft’s potential erosion of its competitors, including Zoom and Slack, by unfairly favouring Teams, its video conferencing platform. These charges constitute the largest the EU has levelled against Microsoft, barring merger controls, since Microsoft’s major tussle with both the EU and US over the Windows operating system over 20 years ago.
The current case has come in the wake of contentious negotiations with regulators following Microsoft’s acquisition of Activision Blizzard for a hefty $75 billion (€70billion) in the previous year. Furthermore, the tech titan is also under investigation for its partnerships with several artificial intelligence startups, OpenAI inclusive.
Competition policy executive vice-president for the EU, Margrethe Vestager, expressed concerns that Microsoft could be using its influence to promote Teams by tying it to its well-known business productivity suites detrimentally to its competitors. If proven, Microsoft’s actions would contravene the EU’s competition regulations, and the company now has the chance to respond to these concerns.
In an effort to evade regulatory reprimands, Microsoft had made some concessions in April, considering the separation of Teams from other software programs like Office, extending beyond Europe. However, the authorities did not consider these remedies sufficient to boost competition. Microsoft president, Brad Smith, responded positively to the charges. He is appreciative of the further clarity provided and committed to addressing the remaining issues
Salesforce president, Sabastian Niles, hailed the allegations as a victory for customer options. Salesforce was the organisation that initially laid complaint against Microsoft, stating that Microsoft’s practices with Teams have jeopardised competition.
The executive branch of the EU, known as the commission, has clarified that the introduction of new charges does not infer any conclusion to the ongoing investigation. Microsoft’s intention in trying to resolve the matter through a settlement aims to prevent a legal violation accusation that could potentially result in a huge fine, equivalent to as much as 10% of its yearly worldwide income, as per sources privy to Microsoft’s strategy.
This development arises amidst increased regulatory observations of Microsoft’s operations. Its $13 billion collaboration with OpenAI is under the regulatory spotlight, as the possibility of a comprehensive investigation by Brussels is being evaluated.
There’s also an objection against Microsoft on the grounds of alleged unfair cloud computing licence agreements put forth by some competitors.
Furthermore, the scrutiny is not confined to Microsoft. Other technology giants are under the lens of the Brussels-based commission. Recently, Apple faced charges from the commission for suppressing competition on its App Store. This marks a first-ever instance where a major technology firm has been charged under the new digitization laws by EU regulators. – Copyright The Financial Times Limited 2024.