The European Commission has said that it believes that Microsoft is breaching EU competition rules by tying Microsoft Teams to applications included in its suites for businesses, Office 365 and Microsoft 365.

The EU body, which began investigating the issue last year, said that changes later introduced by Microsoft had not gone far enough to address its concerns.

Teams is a cloud-based communication and collaboration tool that offers services such as messaging, calling, video meetings, and file sharing.

‘Suite-centric’ model

The commission said that suppliers such as Microsoft were increasingly distributing such products as ‘software as a service’ (SaaS), hosted on cloud infrastructure of the supplier's choice.

It added that, in principle, cloud computing enabled new market players to offer SaaS solutions and customers to use various software from different providers.

The EU body pointed out, however, that Microsoft had a suite-centric business model combining multiple types of software in a single offering.

The commission’s investigation has preliminarily found that Microsoft is dominant worldwide in the market for SaaS productivity applications for professional use.

“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,” it stated.

Distribution

The EU body expressed particular concern that Microsoft might have granted Teams a distribution advantage by not giving customers the choice whether to acquire access to Teams when they subscribed to their SaaS productivity applications.

“This advantage may have been further exacerbated by interoperability limitations between Teams' competitors and Microsoft's offerings,” it added.

“Preserving competition for remote communication and collaboration tools is essential, as it also fosters innovation on these markets,” said Margrethe Vestager (commissioner in charge of competition policy).

The commission has now sent a statement of objections to Microsoft, but stresses that this does not pre-judge the outcome of an investigation.