Microsoft faces EU antitrust probe

Category: AI Asia Europe

Microsoft is set to face its first European Union (EU) antitrust investigation in 15 years over allegations of unfair tying of its video conferencing app Teams with its Office software. The European Commission, the EU’s executive body, is taking action after Microsoft’s previous concessions to address competition concerns were deemed insufficient.

EU is committed to good practice

The investigation is expected to commence next week, and formal charges could be brought against Microsoft as early as autumn. The EU’s decision to initiate the investigation demonstrates its commitment to curbing practices by major tech companies that could hinder competition. Other tech giants, including Apple, Google, and Meta, are also facing probes for alleged anticompetitive behavior.

Microsoft had reportedly planned to stop the automatic installation of Teams on customer devices following a complaint by rival Slack in 2020, citing concerns that bundling the two services violated EU competition laws. However, discussions between Microsoft and the European Commission stalled due to disagreements over the geographical impact of the concessions and the pricing structure for Teams to ensure fair competition.

While talks this week have explored options to avoid a formal investigation, it is highly unlikely that Microsoft will be able to evade one. Microsoft stated that it continues to engage cooperatively with the commission and is open to pragmatic solutions that address concerns and benefit customers. The commission did not provide specific comments but stated that the assessment of the complaint based on standard procedures is ongoing.

Commission to take action

Pressure against Microsoft is mounting politically, with MEP Stéphanie Yon-Courtin urging the commission to take action and require meaningful progress from Microsoft in addressing competition concerns. Yon-Courtin highlighted Microsoft’s dominant market position and the substantial user base of Teams compared to Slack, emphasizing the need for action to prevent Microsoft from leveraging its power unfairly.

This upcoming antitrust probe marks Microsoft’s first investigation by the European Commission since 2008 when the company was accused of abusing its dominant position by bundling its Internet Explorer browser with Windows. Microsoft reached a settlement with the commission, but in 2013, it was fined €561 million for failing to fulfil its commitment.

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