Microsoft faces a substantial antitrust fine from the European Commission following accusations of illegally linking its chat and video app, Teams, with its Office product suite. This results from a 2020 complaint filed by rival workspace messaging app Slack, which is owned by Salesforce.

The European Commission, which functions as the EU’s competition authority, revealed that Microsoft had provided Teams with a distribution advantage. Additionally, restrictions that prevented competitors of Teams from interacting with Microsoft’s other products further hampered rivals’ capabilities. According to the Commission, this bundling practice undermines competition in the market for remote communication and collaboration tools.

Margrethe Vestager, the EU antitrust chief, emphasized the importance of maintaining competition in this sector to promote innovation. “Preserving competition for remote communication and collaboration tools is essential as it also fosters innovation in these markets,” Vestager stated.

Microsoft’s history with EU antitrust fines dates back to two decades ago when it was penalized 2.2 billion euros ($2.4 billion) for similar bundling practices. If found guilty of the current antitrust breaches, the company now faces a potential fine of up to 10% of its global annual turnover.

The Commission has expressed that Microsoft’s actions to address these concerns have been insufficient. Despite initial steps, such as unbundling Teams from Office 365 globally in April and enhancing interoperability with competitors, the Commission indicated that further changes are necessary to restore fair competition.

Brad Smith, Microsoft’s President, reiterated the company’s commitment to resolving the issue. “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,” Smith commented.

Salesforce, through its President and Chief Legal Officer, Sabastian Niles, called for a swift and effective remedy from the Commission to ensure a fair, competitive environment. German rival Alfaview, another complainant, also welcomed the Commission’s charges against Microsoft.

Teams was integrated into Office 365 in 2017 at no extra cost and later replaced Skype for Business. Its usage surged during the COVID-19 pandemic thanks to its video conferencing features. However, competitors argued that bundling Teams with Office 365 gave Microsoft an unfair competitive edge.

In April, Microsoft attempted to mitigate the EU’s antitrust concerns by separating Teams from Office globally and facilitating better interoperability with competing products. Despite these measures, sources indicated that these steps were unlikely to satisfy regulators fully.