[German]It has already been whispered about for a week: The EU Competition Commission is investigating an antitrust complaint against Microsoft because of the Teams bundling with Office 365. On the one hand, competitor Slack had complained about Microsoft to the EU Commission. On the other hand, German provider Alfaview from Karlsruhe is also said to have complained yesterday.
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One of Microsoft's strategies is to bundle everything and anything into its products such as Windows or Office 365 (now called Microsoft 365) and thus flatten the competition. This is likely to take revenge now, as the EU competition authority is launching an antitrust investigation against Microsoft.
The news agency Reuters first reported on July 3, 2023 that an EU antitrust investigation against Microsoft had begun after talks on remedies failed. The specific issue is the bundling of software – in this case, Microsoft Teams with Microsoft Office 365. Microsoft has been supplying Teams free of charge with Office 365 since 2017.
Back in 2020, competitor Slack filed a competition complaint against Microsoft over Teams bundling. Slack was bought out later by Salesforce for a record price of $27.7 billion. But there were other antitrust complaints against Microsoft, for example from Nextcloud (see Nextcloud files competition complaint against Microsoft over OneDrive and Teams in Windows 11).
The EU Commission has therefore been in negotiations with Microsoft for some time to sanction anti-competitive behavior by Microsoft through product bundling. But Microsoft has already been noticed in the past for pushing the limits in the market and with competition authorities.
After all, Microsoft has already come under the scrutiny of the EU antitrust authorities over the past ten years for violating EU competition rules. This also involved the tying or bundling of two or more products. A fine of 2.2 billion euros was imposed.
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In the case of bundling Teams with Office 365, this seems to have backfired again for Microsoft. Back in April 2023, I wrote in the article Microsoft agrees not to bundle Teams with Office reported about an offer from Microsoft to forego the delivery of Teams with Office 365.
A few days ago, some media reported that the EU Commission is preparing antitrust proceedings against Microsoft for bundling Teams with Office 365. The investigation is expected to officially start next week.
Now Reuters writes in this article from July 20, 2023 that another EU antitrust complaint was filed against Microsoft on Thursday (July 21, 2023) by German competitor alfaview. There, too, it was about the bundling of Teams with Office. "Linking Teams with the other applications in the Microsoft 365 suite gives the U.S. group a multipolar distribution advantage," CEO and founder Niko Fostiropoulos said in a statement, according to Reuters.
Microsoft declined to comment to Reuters on alfaview's complaint. The Commission acknowledged receipt of the complaint and said it would investigate it based on its standard procedures. So far, no formal investigation has been launched, but it is expected on a daily basis.
CISPE sees tip of the iceberg
CISPE is an association of 27 cloud infrastructure providers in Europe, and also accuses Microsoft of playing unfairly. In a statement I received, CISPE writes that it expects the EU Commission's investigation to be officially launched as early as next week. The U.S. tech giant had previously made concessions, but the European Commission considered them insufficient.
This investigation marks the European Union's first formal investigation into Microsoft in more than a decade, it says. Francisco Mingorance, secretary general of CISPE (Cloud Infrastructure Services Providers in Europe) says of the EU antitrust investigation:
Microsoft's "economic model" bundles its products with the indispensable Office suite, thus favoring the in-house Azure cloud over competing cloud infrastructures. OneDrive and Defender are also bundled with Microsoft Office to exclude competitors. ChatGPT is next in line. Microsoft's business strategy is to overcharge and discourage customers from using software products outside of Azure.
Relying on the good will, voluntary or secret agreements, and unenforceable concessions of a dominant gatekeeper will not end these unfair practices. CISPE believes this will only happen if, in addition to the Slack investigation, the Commission launches a formal investigation into CISPE's complaint about the broader range of bundling and tying traps that disadvantage European cloud customers.
The association sees the tying of Teams with Microsoft Office software as just the tip of the iceberg and welcomes the launch of the EU investigation.
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