Microsoft under the EC’s microscope: Does Teams limit competition on the SaaS market?

Luc Williams

Microsoft is a technology company that dominates the global market for business productivity applications.

Teams is a cloud tool for communication and work organization. It offers features such as messaging, calling, video conferencing, and file sharing.

The rise of SaaS and cloud computing

Business application software vendors, including Microsoft, are increasingly distributing this software as a cloud service (SaaS). Essentially, cloud computing allows new players to offer SaaS solutions, and customers to use different software from different vendors.

However, as reported by the European Commission, Microsoft has a business model that combines many types of software in one offer. When Teams was launched, Microsoft included it in its widely used cloud suites for business customers – Office 365 and Microsoft 365.

The EC is concerned about Microsoft’s practices regarding Teams

The EC is concerned that Microsoft has been tied up since at least April 2019 Teams with its essential productivity apps SaaSthereby limiting competition in the market for communication and collaboration products and defending its market position against other suppliers.

According to the EC, Microsoft may have given Teams a distribution advantage by not giving customers a choice whether or not to access Teams when they subscribe to its SaaS productivity applications.

“This advantage may have been further exacerbated by limitations in interoperability between Teams competitors and Microsoft’s offerings. This behavior may have prevented Teams rivals from competing, and therefore innovating, to the detriment of customers,” the EC said.

Microsoft is making changes, but the EC continues the proceedings

After the EC initiated proceedings in July 2023, Microsoft introduced changes to the way Teams is distributed. However, the EC initially found that these changes were insufficient to dispel its concerns and initiated new proceedings.

Possible legal and financial consequences for Microsoft

EU law prohibits the abuse of a dominant position. If the EC finds that there is sufficient evidence of a violation, it may impose a fine of up to 10%. the company’s annual turnover on the global market.

From Luxembourg Łukasz Osiński (PAP)


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