EU vs Microsoft: The Teams Bundling Controversy

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In a recent episode of Windows Weekly, hosts Paul Thurrott, Richard Campbell, and Mikah Sargent delve into the European Commission's antitrust concerns regarding Microsoft Teams. The discussion highlights the complexities of the case and raises questions about the fairness of the EU's approach.

The European Commission has issued preliminary charges against Microsoft, alleging that bundling Teams with Microsoft 365 (formerly Office) violates antitrust laws. This complaint, initially brought forward by Slack in 2020, argues that Microsoft's practice unfairly disadvantages competitors in the collaboration software market.

Paul Thurrott pointed out that Microsoft has been proactively working with EU regulators to address these concerns. The tech giant has already taken steps to unbundle Teams from Microsoft 365 in Europe and has reduced the suite's price without Teams. However, the EU seems unsatisfied with these measures, leaving Microsoft in a challenging position.

The hosts provided crucial historical context, noting that Teams is the latest iteration in a long line of Microsoft communication tools dating back to 2007. Products like Office Communicator, Lync, and Skype for Business preceded Teams, existing well before Slack's 2013 launch. Thurrott drew an interesting parallel to the video game industry, comparing the situation to how established franchises like Call of Duty adapted to newcomers like PUBG and Fortnite by introducing their own battle royale modes. This analogy raises questions about when product evolution becomes an unfair competition.

The discussion highlighted the nuanced nature of antitrust law in the tech sector. Richard Campbell noted the difference between US antitrust law, which focuses on harm to consumers, and the EU's approach, which considers the concept of "gatekeepers" in digital markets. The hosts expressed frustration with the EU's lack of clear guidance on what Microsoft needs to do to resolve the issue. Unlike the recent case against Apple, where the EU provided specific action points, the Microsoft case seems more ambiguous.

The conversation raised several thought-provoking questions:

• How do you determine the fair value of a single component within a comprehensive suite of products and services?
• At what point does product innovation cross the line into unfair competition?
• Should Microsoft be held to different standards because of its market position, even if it's improving its products?

The Windows Weekly team's discussion provides valuable insights into the complex world of tech antitrust cases and the challenges regulators and companies face in this rapidly evolving landscape.

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