Microsoft Hit With EU Antitrust Complaint From German Rival Over Teams' Inclusion to Office Bundle

Microsoft was hit with an EU antitrust complaint by German rival Alfaview on Thursday, the second so far over its bundling of video app Teams into its Office product, as the bloc's regulator prepares to investigate the US tech giant.

The US software company has been on the EU competition enforcer's radar since 2020 when Salesforce-owned workspace messaging app Slack complained about the tying of Teams with Office.

Alfaview, based in Karlsruhe in south-western Germany and with a 500-strong workforce, said it had filed a similar complaint to the European Commission.

Bundling both products together gives Teams a unique competitive advantage that is not justified by performance and which rivals cannot match, it said.

This has a significant and permanent impact on competition in the communication software market, Alfaview continued.

"Tying Teams with the other applications in the Microsoft 365 suite creates a multipolar distribution advantage for the US group," its managing director and founder, Niko Fostiropoulos, said in a statement.

Microsoft declined to comment on Alfaview's complaint. The Commission confirmed receipt of the complaint, saying it would assess it based on its standard procedures.

Microsoft added Teams to Office 365 in 2017 for free, with the app eventually replacing Skype for Business.

The Commission is set to launch an investigation into the move after Microsoft's remedies fell short, people familiar with the matter told Reuters earlier this month.

Microsoft, which has been fined a total of 2.2 billion euros ($2.5 billion or roughly Rs. 20,505 crore) in the previous decade for practices in breach of EU competition rules, has offered to cut the price of its Office product without Teams, but regulators want a bigger reduction, the people said.

No formal investigation has been opened yet, but Microsoft is subject to an informal probe.

"We continue to engage cooperatively with the Commission in its investigation and are open to pragmatic solutions that address its concerns and serve customers well," a Microsoft spokesperson said.

Alfaview urged the EU antitrust watchdog to open a formal investigation, saying remedies offered by its US rival to the Commission were insufficient. 

© Thomson Reuters 2023