On July 20th, Microsoft faced an antitrust complaint from its German rival, alfaview, in the European Union (EU). This is the second complaint related to Microsoft’s bundling of its video app, Teams, into its Office product. The EU’s regulatory body is gearing up to investigate the U.S. tech giant over this matter.
The European Commission has been monitoring Microsoft since 2020 when Slack, a workspace messaging app owned by Salesforce, lodged a complaint regarding the practice of tying Teams with Office.
Alfaview, a company based in Karlsruhe, south-western Germany, with a workforce of 500 employees, has also filed a complaint with the European Commission similar to the one made by Slack. According to alfaview, Microsoft’s practice of bundling Teams with Office provides an unfair competitive advantage that is not justified by the performance of the products, making it difficult for rivals to compete on an equal footing.
The company argues that this bundling strategy has a substantial and lasting impact on competition in the communication software market. This complaint adds to the scrutiny Microsoft is facing from the EU’s competition authorities, and the issue will be investigated to determine whether it violates antitrust regulations in the region.
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Niko Fostiropoulos, the managing director and founder of alfaview, stated that the practice of bundling Teams with other applications in the Microsoft 365 suite gives the U.S. tech giant a significant advantage in distribution. According to alfaview, this advantage is not based on fair competition and creates an unequal playing field for competitors.
Microsoft has chosen not to comment on alfaview’s complaint. However, the European Commission confirmed that they have received the complaint and will assess it following their standard procedures.
It’s worth noting that Microsoft integrated Teams into Office 365 in 2017, offering the app for free. Over time, Teams has become a replacement for Skype for Business within the suite.
As the investigation proceeds, both Microsoft and the European Commission will likely play crucial roles in determining the outcome and addressing any potential antitrust concerns in the market.
Microsoft : EU Antitrust Complaint Filed by German Rival Alfaview Against Microsoft’s Bundling Practices
Microsoft : As of earlier this month, people familiar with the matter informed Reuters that the European Commission is preparing to launch an investigation into Microsoft’s bundling of Teams with its Office product. This comes after the remedies proposed by Microsoft were deemed inadequate by the regulators. In the past decade, Microsoft has faced fines totaling 2.2 billion euros ($2.5 billion) for breaching EU competition rules.
While Microsoft has offered to lower the price of its Office product without Teams, the regulators are seeking a more substantial reduction, as reported by the same sources.
At this stage, no formal investigation has been initiated, but Microsoft is under informal scrutiny. A Microsoft spokesperson stated that they are cooperating with the Commission during the investigation and are open to practical solutions that address the Commission’s concerns and also benefit customers.
On the other hand, alfaview, the German rival of Microsoft, has urged the EU antitrust watchdog to launch a formal investigation, asserting that the remedies offered by Microsoft to the Commission are insufficient.
FAQ’s
Q. What is the EU antitrust complaint against Microsoft?
A. The EU antitrust complaint against Microsoft is filed by German rival alfaview, alleging unfair competitive advantage due to the bundling of Microsoft Teams with its Office product.
Q. Why is Microsoft facing an antitrust complaint in the EU?
A. Microsoft is facing an antitrust complaint in the EU over concerns that its bundling of Teams with Office creates an unequal playing field in the communication software market.
Q. Has Microsoft been fined for breaching EU competition rules before?
A. Yes, Microsoft has faced fines amounting to 2.2 billion euros in the previous decade for practices that were deemed in breach of EU competition rules.
Q. What remedies has Microsoft offered to address the antitrust concerns?
A. Microsoft has offered to reduce the price of its Office product without Teams, but the regulators are seeking a larger reduction to ensure fair competition.
Q. Is the European Commission formally investigating Microsoft’s practices?
A. At present, the European Commission is conducting an informal probe into Microsoft’s bundling practices, but a formal investigation is set to be launched following concerns about the adequacy of the proposed remedies.
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