European Union officials have tentatively determined that Microsoft Corp. breached the bloc’s antitrust rules with its Microsoft Teams collaboration service.

The European Commission, the EU’s executive branch, published its findings today. The development is not unexpected. Rumors that EU officials plan to bring antitrust charges against Microsoft first emerged in April.

Teams, the service at the center of the regulatory action, shipped with the company’s Microsoft 365 productivity suite until last year. It was previously sold as part of Office 365, an earlier version of the suite that included many of the same applications. Customers didn’t have the option to remove Teams from their subscriptions.

The European Commission found that Microsoft’s practice of bundling Teams with its other productivity applications breached the EU’s competition rules. In particular, officials determined that the practice gave Teams an unfair “distribution advantage” over rivals such as Slack. “The conduct may have prevented Teams’ rivals from competing, and in turn innovating, to the detriment of customers in the European Economic Area,” the commission stated.

Officials believe that the issue may have been exacerbated by limitations on interoperability between Microsoft 365 and applications that compete with Teams. Several rival collaboration services interoperate with Microsoft 365 through connectors for the suite’s applications. Those connectors enable users to perform tasks such as accessing documents stored in OneDrive, Microsoft’s file sharing platform.

The EU began scrutinizing Microsoft’s interoperability and product bundling practices after Slack filed a complaint over the matter in 2020, the year before its acquisition by Salesforce Inc. Three years later, Germany-based videoconferencing provider Alfaview submitted a similar complaint. The moves prompted the EU to open a formal antitrust investigation into Microsoft last July.

In response to the probe, the company unbundled Teams from Microsoft 365’s business versions. New customers can no longer purchase Microsoft 365 subscriptions that include the collaboration service. Existing users, in turn, can switch to versions of the productivity suite that don’t include Teams when their existing contract expires or on the contract’s anniversary.

Microsoft will likely have to take additional steps to address the EU’s antitrust concerns. “The Commission preliminarily finds that these changes are insufficient to address its concerns and that more changes to Microsoft’s conduct are necessary to restore competition,” the commission stated today.

If EU officials find that a company has breached the bloc’s antitrust law, they can not only order changes to its business practices but also issue fines. Those fines can amount to up to 10% of the company’s annual worldwide revenue.

Slack parent Salesforce stated today that “the Statement of Objections issued today by the European Commission is a win for customer choice and an affirmation that Microsoft’s practices with Teams have harmed competition.”

Microsoft President Brad Smith stated in a statement that “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.”

Photo: Microsoft