Microsoft to face new European Commission investigation in to bundling of Teams

 

Microsoft to face new European Commission investigation in to bundling of Teams

As the European Commission and other competition and regulatory bodies intensify their interest in the technology sector, Microsoft is facing a new antitrust probe into bundling of its Office products with its Teams services.

Media reports, including in the Financial Times, have suggested that a formal probe could be launched as early as the coming week, if suitable remedies cannot be found.

The Commission’s antitrust concerns follow a complaint first made by Slack in 2020, now part of Salesforce.  German supplier Alfaview has raised similar concerns. The complaints allege that Microsoft has abused its dominant position by bundling of the two services – Office and Microsoft Teams – such that rival suppliers of video conferencing services cannot compete on the merits where users have the bundle of services automatically installed on their devices.

This is not the first time that Microsoft has faced antitrust scrutiny over bundling practices. 

The General Court’s 2007 decision upheld the Commission’s 2004 decision that Microsoft had unlawfully tied its Media Player (“WMP”) with the Windows Operating System (WOS) thereby foreclosing innovation and limiting consumer choice. The case involved technical tying through the technical integration of one product (WMP) into another (WOS).  Four years after the Commission’s 2004 decision, it fined Microsoft EUR899 million for failure to comply with the part of the decision that required Microsoft to licence its interoperability information for a reasonable fee.

A second major competition law probe in relation to Microsoft concerned an allegation of foreclosure contrary to Article 102 on the basis that Microsoft was tying its browser (Internet Explorer) to the WOS. Rather than the case being resolved with an infringement decision under Article 7 of Regulation 1/2003, Microsoft offered commitments under Article 9.  These involved commitments to (1) make available a mechanism in its Windows 7 (and subsequent) operating systems within the EEA enabling Internet Explorer to be turned off and on; and (2) to distribute a software update to EEA users of WindowsXP, Windows Vista and Windows 7 to introduce a Choice Screen to give consumers a choice of competing web browsers.  No fine was imposed to resolve the Commission’s investigation but in 2013 Microsoft was fined EUR561 for violating its commitments.

Microsoft is understood to be in discussions with the Commission to seek to resolve the pending investigation.

Case COMP/C-3/37.792 Microsoft, decision of 24 March 2004

Case T-201/04 Microsoft Corporation v Commission [2007] ECR II-3601

Case COMP/39.530 — Microsoft (Tying), decision of 16 December 2009