Microsoft Corp. could find itself the target of a new antitrust investigation in Europe after talks with regulators aimed at averting such a move broke down, Reuters reported Monday.

The investigation stems from a 2020 complaint by the Salesforce Inc.-owned messaging app Slack, relating to Microsoft’s 2017 decision to bundle its Teams collaboration application with Office 365, effectively making it free for Office users. The Teams app eventually replaced Microsoft’s previous chat and video conferencing app, Skype for Business.

Microsoft has previously been slapped with fines totaling billions of dollars by the EU for breaching its competition rules, which include prohibitions on tying or bundling two or more products together. In its complaint, Slack argued that Microsoft has harmed competition by integrating the Teams chat and video app with its Office product.

Last year, in a bid to stave off a full blown investigation, Microsoft began talking to the European Commission. According to Reuters, the company offered to sell a cheaper version of Office 365 that doesn’t provide access to the Teams app.

However, the European Commission, which oversees such matters in the EU, reportedly rejected the offer. Reuters cited people familiar with the matter as saying it is seeking a deeper price cut than the one that was offered by Microsoft. The Commission believes that a wider price differential between Office 365 with Teams, and Office alone, would create a more level playing field and result in greater choice for consumers, the report added.

Microsoft risks a fine of up to 10% of its global revenue if it is found to be in breach of the EU’s antitrust rules, so it’s not an insignificant matter for the company. Reuters said the company may decided to improve its offer before the Commission begins an official investigation.

“We continue to engage cooperatively with the Commission in its investigation and are open to pragmatic solutions that address its concerns and serve customers well,” a spokesperson for Microsoft said.

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