Slack files EU antitrust complaint against Microsoft for bundling Teams with Office

Slack has filed an anticompetition complaint against Microsoft in Europe, arguing that the software giant “illegally” bundles Teams into its omnipresent Microsoft Office product.

Microsoft launched its Slack-style enterprise communication Teams platform back in 2016, and the two companies have enjoyed some healthy rivalry — Slack even went so far as to take out a full-page advertisement in the New York Times telling Microsoft what it needs to do to succeed in the team communication sphere.

While both Slack and Microsoft Teams have benefited from the surge in remote-working due to the COVID-19 crisis, Slack has now officially filed a complaint with the European Commission (EC), asking it to take “swift action to ensure Microsoft cannot continue to illegally leverage its power from one market to another by bundling or tying products.”

While Slack is broadly available as a standalone service and application with various pricing tiers, Microsoft Teams comes as part of an Office 365 subscription, though there is a free version of Teams available too. At the crux of Slack’s complaint is that Microsoft is using its market dominance with Office to force millions of people to install Teams, with no way to remove it and no clear way of knowing how much Teams actually costs, given that it’s bundled as part of a broader subscription.

Slack writes in its complaint:

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.

Competition

There has been a slow but steady build up to today’s news, with Slack CEO Stewart Butterfield often calling out Microsoft over the way it bundles Teams with Microsoft, and also how Microsoft defines its daily active users (DAUs) to highlight the product’s growth compared to Slack.

According to Microsoft, “active usage” is any action that takes place inside the Microsoft Teams app, including starting a chat, sharing a file, and making a video call — indeed, Microsoft Teams contains functionality such as Skype-like VoIP calling, meaning that businesses may not always be using Teams in the same way as they would Slack. Butterfield has long argued that Microsoft is used primarily for voice- and video-calling, similar to Zoom, and that “Microsoft benefits from the narrative” that Teams is a direct competitor to Slack.

What’s perhaps most interesting here is that Butterfield has gone on record recently to say that he doesn’t view Teams as a true competitor for the aforementioned reasons, yet Slack is now filing an anticompetition complaint against Microsoft. But what Slack is really accusing Microsoft of here is using its power to kill Slack, which it said threatens Microsoft’s hold on an enterprise that is still largely reliant on email.

“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, in a press release. “Slack threatens Microsoft’s hold on business email, the cornerstone of Office, which means Slack threatens Microsoft’s lock on enterprise software.”

It’s worth noting here that Slack has only filed a complaint for now — the next step will be for the EC to decide whether to open a formal investigation.

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