Microsoft violated EU antitrust rules by bundling its Teams communications app with its popular Office suite, Brussels said on Tuesday, as the US tech giant vowed to do what it takes to address competition concerns.
The charge sheet comes after the European Commission, the EU's influential antitrust regulator, launched a probe last year triggered by a 2020 complaint from Slack.
The commission informed Microsoft of its "preliminary view" that it had "breached EU antitrust rules" by bundling Teams with its cloud-based Office 365 and Microsoft 365 suites, which include Word, Excel and Powerpoint programmes.
Even before the charges, Microsoft tried to assuage the EU's concerns by untying Teams in Europe before expanding the policy to around the world in April.
The EU also had worries that Microsoft may have limited interoperability between Teams' competitors and its own offerings, although the company in September 2023 introduced "improvements" to make it easier for rivals.
But the commission said Microsoft's changes did not go far enough.
"The commission preliminarily finds that these changes are insufficient to address its concerns and that more changes to Microsoft's conduct are necessary to restore competition," it said in a statement.
The EU's competition commissioner, Margrethe Vestager, said "Microsoft now has the opportunity to reply to our concerns".
The company will be able to offer commitments to avoid a large fine and president Brad Smith has indicated Microsoft would be willing to take further steps.
"Having unbundled Teams and taken initial interoperability steps, we appreciate the additional clarity provided today and will work to find solutions to address the commission's remaining concerns," Smith said in a statement.
Slack had lodged its complaint as its market share diminished, and it has since been bought by the company Salesforce.
There is no deadline for the formal inquiry to wrap up.
Should the outcome of the probe go against Microsoft, it could face a heavy fine or other ordered remedies.
Microsoft has come under greater European scrutiny in recent months.
EU regulators are looking into Microsoft's partnership with ChatGPT developer OpenAI to determine whether it is a disguised merger.
The commission also received a separate complaint in late 2022 from Amazon-backed cloud trade group CISPE against Microsoft over its cloud licensing practices.
The two sides are currently seeking to resolve the issue through talks.
