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Microsoft faces antitrust violation for bundling Teams with Office software   

FILE - The Microsoft logo is pictured outside the company visitor center in Redmond, Wash., July 3, 2014.
FILE - The Microsoft logo is pictured outside the company visitor center in Redmond, Wash., July 3, 2014.

European Union regulators have accused Microsoft of breaking antitrust rules by tying its Teams messaging and videoconferencing app to its popular business software.

The European Commission — the EU’s antitrust enforcer — says that making Teams automatically available with Office 365 and Microsoft 365 limits options for customers who might prefer other messaging apps such as Slack.

Alfaview, a German competitor and complainant, welcomed the commission's action against Microsoft. Teams was integrated into Office 365 in 2017 and replaced Skype for Business. Its popularity surged during the pandemic, but rivals argue that bundling gave Microsoft an unfair edge.

Microsoft has been given an opportunity to respond to the accusations, formally referred to as a statement of objections, before the commission reaches a final decision. If found guilty of antitrust violations, it could face a fine of up to 10% of its global annual revenue.

The action comes two decades after Microsoft's previous fine from the EU. It was fined $2.4 billion for bundling products and violating other antitrust laws.

Microsoft implemented changes in April to avoid a penalty, including providing customers worldwide with the ability to get Microsoft 365 and Office 365 without Teams. Those suites include programs such as Outlook, Excel and Word.

The European Commission said that Microsoft’s actions hadn’t adequately addressed the concerns and that more changes are necessary to restore competition.

EU regulators are urging the company to sell Office without Teams at a reduced price. Competitors are pushing for clearer interoperability terms and more incentives to attract users to their platforms.

“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.” Microsoft President Brad Smith said.

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