Microsoft Faces EU Investigation Over Teams Marketing, Could Face Hefty Fines
The European Commission has initiated an investigation into Microsoft’s marketing practices for its Teams Video platform. This move comes as part of the commission’s ongoing efforts to scrutinize the marketing strategies of big US tech companies. Under new, stricter laws in the European Economic Area, fines of up to six percent of global annual revenue can be imposed.
The European Commission has already handed out substantial fines to other tech giants, including Google, Meta Platforms, and Amazon. These fines have amounted to billions of dollars, highlighting the commission’s commitment to regulating the digital landscape. Now, it is Microsoft’s turn to face the heat.
The investigation against Microsoft stems from allegations that the company has been tying the availability of Teams Video to its Office 365 and Microsoft 365 subscriptions. In an attempt to preempt the probe, Microsoft had offered to sell Teams separately in Europe, with a discount. However, this proposal did not alleviate the European Commission’s concerns regarding antitrust practices. The complainant, Salesforce’s Messaging Platform Slack, which filed its complaint three years ago, also expressed dissatisfaction with Microsoft’s unbundling plan.
The European Commission views Microsoft’s bundling of Teams Video with its other products as giving the company an unfair advantage in the market. This situation echoes previous antitrust cases involving Microsoft in the European Economic Area, such as the fines the company received in 1998 for bundling Internet Explorer with Windows and in 2013 for non-compliance with a 2004 settlement addressing bundling and interoperability issues.
Despite Microsoft’s recent proposal to unbundle Teams, address interoperability concerns, and allow third-party software to host Office web applications, the European Commission remains unsatisfied. This suggests that the commission is examining the broader marketing tactics employed by US tech giants, particularly the creation of walled gardens that force users to purchase additional products from a single vendor or face compatibility issues.
This investigation is part of a larger effort by the European Commission to regulate digital platforms and protect third-party businesses. The recently implemented Digital Services Act aims to provide access to data generated on digital platforms, prevent the favoritism of a tech platform’s own products, and ensure that consumers can link to businesses outside the platform. In addition, big tech firms operating in Europe can now face fines amounting to up to six percent of their global annual revenue, as well as temporary bans.
While big tech companies in Australia have been lobbying against adopting similar laws to those implemented by the European Commission, governments around the world are increasingly focusing on regulating the digital sphere, including areas like artificial intelligence.
In conclusion, Microsoft is facing an EU investigation over its marketing practices for Teams Video. The company’s bundling of the platform with its other products has raised antitrust concerns among European regulators. As the European Commission takes steps to regulate the digital landscape, big tech firms need to navigate new laws and regulations to avoid hefty fines and other penalties.
