Microsoft falls due to Anitrust Violation ?
Finally Arrived.
On Tue, 25 Jun 2024 - Microsoft finally came face-to-face with a hefty antitrust fine, after the European Commission accused the IT giant of illegally linking its chat and video app “Teams” with its Office product.
It was first reported by Reuters back in April 2024 that the EU was preparing the charges. It finally happened.
It has been 20 years since Microsoft was last fined by the EU.
The EU competition watchdog's latest action was triggered by a 2020 complaint from rival workspace messaging app Slack, owned by $Salesforce.com(CRM)$ .
The Complaint.
In 2017, MS Teams was added to Office 365, free.
It replaced Skype for Business, subsequently.
Team’s popularity soared during the pandemic due in part to its video conferencing feature.
Rivals claimed that bundling the products together gave Microsoft an unfair advantage.
The Mitigation.
In April 2024, Microsoft introduced new licensing options that allowed customers to purchase Office 365 globally, without Teams, offering a lower price for those who did not need the collaboration features.
This was carried out to (a) resolve EU antitrust concerns and (b) also made it easier for rivals to function with its products.
When the de-coupling happened, sources had speculated the unbundling was unlikely to appease regulators.
The European Commission, acting as the EU competition watchdog, said:
Teams had been given a distribution advantage.
While limitations prevent interaction between Teams' competitors and Microsoft's offerings, further hindered rivals.
EU antitrust chief Margrethe Vestager further added:
Preserving competition for remote communication and collaboration tools is essential.
Doing so fosters innovation on these markets.
The Fine.
Two decades ago, the US tech giant had to pay EUR 2.2 billion (US$2.4 billion) in EU antitrust fines for tying, or bundling, two or more products together.
Microsoft have an opportunity to present its own evidence in response to the objections before the EC issues a final decision on whether or not the bloc’s antitrust laws were breached.
What is at stake ?
For the current antitrust breaches, if found guilty - Microsoft is at risk of being fine as much as 10% of its Global annual turnover.
What Else?
The Commission said Microsoft’s action did not sufficiently address its concerns and more changes were necessary to restore competition.
The Accused.
Microsoft President Brad Smith reiterated comments made earlier this month about the company's willingness to resolve the issue:
Microsoft appreciates the additional clarify provided by the EU Commission.
And will work to find solutions to address the Commission’s remaining concerns.
This comes about after Microsoft has unbundled Teams and taken initial interoperability steps.
The Accusers.
Salesforce President and Chief Legal Officer Sabastian Niles urged the Commission to move towards a swift, binding and effective remedy to restore a free and fair choice.
German rival and complainant Alfaview, Chief Executive - Niko Fostiropoulos welcomed the Commission's charge against Microsoft.
He shared the view that the countermeasures taken by Microsoft were “insufficient”, as they maintain the bundling in essential parts.
He added that direct talks between Microsoft and alfaview also failed to result in a solution that would address the competition concerns.
My viewpoints: (mine only)
I believe that Europeans justice is largely fair and just, meaning political agendas though exits are managed.
There are :
Clear Rules: The EU has well-defined competition rules outlined in the Treaty on the Functioning of the European Union (TFEU) and further elaborated in regulations and guidelines. This transparency provides a clear framework for businesses to operate within.
Due Process: Companies under investigation have the right to be heard, defend themselves, and access their case file. The Commission follows established procedures and allows for appeals.
Level Playing Field: The goal of antitrust enforcement is to ensure a level playing field for all businesses in the EU, promoting fair competition and consumer welfare.
However, I cannot say much about the speed and agility at which justice is being served.
Case in point, the complaint against Microsoft unfair bundling of MS Team with Office 365 was filed in year 2020.
It took European Commission almost 4 years to bring the unfair practice to court.
I don’t know about you but 4 years is a very long time.
If the complainant is a small outfit, they might have declared bankruptcy and folded due to Microsoft unfair practice impact. The European Commission “bureaucracy” has no place in the modern economy.?
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