Slack files EU antitrust complaint against Microsoft, alleging it illegally ties Teams to Office

Slack says it has filed an antitrust complaint against Microsoft in Europe, alleging that the tech giant is illegally leveraging its dominant Office productivity suite to give its Microsoft Teams software an unfair advantage in the booming market for collaboration technology.

The complaint, announced Wednesday morning, puts the antitrust spotlight back on Microsoft at a time when the Redmond company had largely moved beyond intense regulatory scrutiny.

Slack’s complaint “details Microsoft’s illegal and anti-competitive practice of abusing its market dominance to extinguish competition in breach of European Union competition law,” the company says in a news release. “Microsoft has illegally tied its Teams product into its market-dominant Office productivity suite, force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers.”

Microsoft has not yet commented publicly on the complaint.

The timing of Slack’s announcement is notable, two hours before Microsoft CEO Satya Nadella’s address at the company’s virtual Inspire partner conference, where Microsoft on Tuesday announced new features for its Teams software. Brad Smith, Microsoft’s president and longtime legal and policy leader, is also speaking at the event, where the addresses by executives have largely been prerecorded.

Microsoft reports earnings for its fiscal fourth quarter on Wednesday afternoon.

Slack’s complaint drags Microsoft into an era of competitive scrutiny of Big Tech that the software giant has largely avoided up until now. Microsoft had its turn in the antitrust hotseat in the 90s and early 2000s but has largely avoided the current wave of oversight that its peers Apple, Amazon, Facebook, and Google are experiencing.

U.S. regulators pursued a case against Microsoft 20 years ago over how the company bundled Internet Explorer with its Windows operating system. Microsoft ultimately settled the case and has positioned itself as the moral compass of the technology industry in the two decades that followed.

The strategy has been so effective that Microsoft President Brad Smith advised a House antitrust subcommittee on competitive issues ahead of a hearing with the CEOs of Apple, Amazon, Google, and Facebook, The Information reported this week. The House subcommittee is one of several regulatory bodies investigating whether those companies have become so dominant that they hinder competition.

Developing story, more to come. Here is Slack’s full news release.

SAN FRANCISCO–(BUSINESS WIRE)–Slack Technologies, Inc., (NYSE: WORK) today announced it has filed a competition complaint against Microsoft Corporation before the European Commission.

The complaint details Microsoft’s illegal and anti-competitive practice of abusing its market dominance to extinguish competition in breach of European Union competition law. Microsoft has illegally tied its Teams product into its market-dominant Office productivity suite, force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers.

“We’re confident that we win on the merits of our product, but we can’t ignore illegal behavior that deprives customers of access to the tools and solutions they want,” said Jonathan Prince, Vice President of Communications and Policy at Slack. “Slack threatens Microsoft’s hold on business email, the cornerstone of Office, which means Slack threatens Microsoft’s lock on enterprise software.”

“But this is much bigger than Slack versus Microsoft – this is a proxy for two very different philosophies for the future of digital ecosystems, gateways versus gatekeepers,” Prince said. “Slack offers an open, flexible approach that compounds the threat to Microsoft because it is a gateway to innovative, best-in-class technology that competes with the rest of Microsoft’s stack and gives customers the freedom to build solutions that meet their needs. We want to be the 2% of your software budget that makes the other 98% more valuable; they want 100% of your budget every time.”

“Slack simply wants fair competition and a level playing field. Healthy competition drives innovation and creates the best products and the most choice for customers. Competition and antitrust laws are designed to ensure that dominant companies are not allowed to foreclose competition illegally. We’re asking the EU to be a neutral referee, examine the facts, and enforce the law,” said David Schellhase, General Counsel at Slack. “Microsoft is reverting to past behavior. 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.’ Slack is asking the European Commission to take swift action to ensure Microsoft cannot continue to illegally leverage its power from one market to another by bundling or tying products.”

The European Commission will now review the complaint and decide whether to open a formal investigation into Microsoft’s anti-competitive practices.

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