The European Union is poised to deliver fresh antitrust allegations against Microsoft, incited by concerns that the tech behemoth may be hobbling competitors to its videoconferencing tool, Teams. This is part of the EU regulators’ persistent vigilance over the prevailing sway of major tech firms.
Well-informed sources revealed that the European Commission is preparing to bring formal charges against the globally high-ranking tech corporation, suspecting it of creating a restrictive environment that hampers competitive growth in the industry.
Microsoft attempted to sidestep regulatory scrutiny by proposing concessions last month, which involved plans to separate Teams from other software like Office, not only in Europe, but worldwide.
Despite these efforts, the EU officials, apprehensive about the company’s market sportsmanship, believe that Microsoft’s measures fell short of ensuring market equity.
Competitors worry that Microsoft will optimise Teams to work more congruently with its own software than with other applications. They also suggest that Microsoft’s pricing strategies offer little encouragement for users to opt for different videoconferencing tools. The impediment to data portability, they claim, makes it tough for current Teams users to transition to other options.
The impending action from the commission would escalate a case originating from a formal grievance lodged by Slack – now under Salesforce’s umbrella – against Microsoft’s Teams in 2020.
The actions potentially signal the conclusion of the decade-long peace treaty between the US tech firm and EU watchdogs, succeeded by a chain of competition investigations that wrapped up in 2013. At the time, Microsoft was slapped with a sizeable €561 million penalty by the EU for neglecting to honour a ruling concerning the amalgamation of the Internet Explorer browser and its Windows operating system.
According to insiders, the charges might materialise in the upcoming weeks. The rivals of Microsoft and the commission are holding discussions about the case this week, indicating that the allegations are in the pipeline.
However, there are warnings that Microsoft might yet present last-ditch compromise offers to throw a spanner in the EU’s proceedings, or alternatively, the commission may defer or entirely discard the charges against the firm.
Should Microsoft be found in violation of EU competition legislation, it could face penalties totaling up to 10% of its annual global revenue.
The firm chose not to respond, yet pointed to a preceding declaration, stating that it intended to persist in collaborative dialogues with the commission, pay attention to marketplace apprehensions, and stay committed to investigating practical answers that serve both European consumers and developers. Silence was the commission’s response.
The EU’s intensified focus on its operations has coincided with action taken against Microsoft. The EU is currently examining if the technological organisation’s $13 billion (€12 billion) partnership with OpenAI, the creator of ChatGPT, infringes competition legislation.
Within Europe’s trading sphere, Microsoft is grouped among a select few technology companies, including Google and Meta, that are categorised as “gatekeepers” due to the new Digital Markets Act. This designation means the company holds distinct responsibilities.
Moreover, Microsoft has had to deal with grievances from European cloud computing service providers who speculate that it utilises its dominant stature within the sector as a tool to pressure customers into purchasing its products. This approach, they argue, stifles competition, particularly that from smaller European start-ups. – Rights reserved to The Financial Times Limited, 2024.