Microsoft on Tuesday got a formal warning from European Union competition regulators over how it leverages its Office software suite to benefit its video conferencing product Teams.
The warning follows a complaint by the competing office platform Slack. The technology giant could face anything from fines up to 10 percent of annual worldwide turnover to orders to break up or sell products if it is found to have breached European rules.
EU competition chief Margrethe Vestager said officials are “concerned that Microsoft may be giving its own communication product Teams an undue advantage over competitors by tying it to its popular productivity suites for businesses.”
The Commission sent a statement of objections to the company on Tuesday, saying that Teams — which offers video calls and other office collaboration tools — could have received a “distribution advantage” because Microsoft customers didn’t get a choice of whether to access that or rival products.
The EU’s investigation, triggered by a 2020, is the latest in a long list of EU crackdowns on Microsoft over competition concerns. The Commission over the years racked up some €2 billion in fines in a slew of cases. It last paid a €561 million fine in 2013 for failing to comply with an earlier pledge.
The company can now defend itself in writing against the charges or seek an oral hearing with regulators.
The Commission said its view is that Microsoft may be dominant worldwide for productivity applications for professional use. The company may have been tying Teams to its software as a service applications since at least April 2019 “thereby restricting competition on the market for communication and collaboration products”
The software giant has made changes to try and appease the Commission. It offered to split off Teams from its software packages in Europe last September and later extended that offer globally this year. Microsoft President Brad Smith said the company could make more changes to try and settle the case, during a press conference in Brussels earlier this month that came hours after he met Vestager.
The Commission said Tuesday that earlier tweaks “are insufficient to address its concerns and that more changes to Microsoft’s conduct are necessary to restore competition.”
Smith said in a statement Tuesday that “we appreciate the additional clarity provided today and will work to find solutions,” to address the EU’s concerns.
This article has been updated.