Is Microsoft returning to its bad old ways, or just competing more effectively against upstarts like Slack? Those are the opposing viewpoints in what has suddenly become an antitrust battle between the collaboration technology rivals.
Responding to Slack’s EU competition complaint Wednesday morning, Microsoft pointed to its early adoption of video conferencing technologies in Microsoft Teams, implying that any harm to Slack’s market position by Microsoft was due more to its competitive differentiation. Video has become an increasingly important capability as more people work from home.
“We created Teams to combine the ability to collaborate with the ability to connect via video, because that’s what people want,” Microsoft said in a statement. “With COVID-19, the market has embraced Teams in record numbers while Slack suffered from its absence of video-conferencing. We’re committed to offering customers not only the best of new innovation, but a wide variety of choice in how they purchase and use the product.”
Slack offers video calls and conferencing, but the features aren’t as robust as in Microsoft Teams, Google Meet or Zoom, with Slack video conferencing limited to 15 participants, for example. Slack video and audio quality often lagged in the past, but seems to have improved since Slack expanded its partnership with Amazon to use AWS Chime to power voice and video calls for Slack users. In shifting to Amazon’s infrastructure, Slack is shifting away from a system based on technology from its 2015 acquisition of the startup Superhero.
In the announcement of its antitrust complaint, Slack painted a very different picture of Microsoft’s actions, saying the company unfairly bundles Teams as part of its larger Office productivity technology for business users — an allegation reminiscent of the core antitrust case against Microsoft’s inclusion of Internet Explorer with Windows in the 1990s.
“Microsoft is reverting to past behavior,” David Schellhase, general counsel at Slack, said in a statement. “They created a weak, copycat product and tied it to their dominant Office product, force installing it and blocking its removal, a carbon copy of their illegal behavior during the ‘browser wars.’ ”
The announcement came shortly before Microsoft CEO Satya Nadella delivered a pre-recorded address for the company’s virtual Ignite partner conference. Nadella spent part of the address talking about Microsoft Teams momentum, with 75 million daily active users, and adoption by large organizations such as L’Oreal and the University of Texas in Arlington.
Nadella also pointed to new video features such as “Together Mode” in Microsoft Teams. Announced two weeks ago, the feature places participants against a shared virtual background, removing individual backdrops in an effort to make it easier to pick up on non-verbal cues and to interact more like in real life.
Teams is “the hub of teamwork in Microsoft 365,” Nadella said in the pre-recorded video, referring to Microsoft’s overarching software subscription for businesses. “Teams helps people to be more productive and collaborative before, during and after meetings and addresses the fundamental challenges like video meeting fatigue.”
Nadella will have an opportunity to address the Slack complaint live later this afternoon, as Microsoft talks with analysts and investors following its fiscal fourth quarter earnings release, scheduled to take place after the market closes. Analysts expect the company to report earnings of $1.37 per share, matching its results from a year earlier, on revenue of $36.5 billion, up 8% from revenue of $33.7 billion in the same quarter a year ago.
Slack’s full complaint to the European Commission has not yet been made public, and the company declined to provide a copy in response to our request.
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