Microsoft Faces Heightened EU Scrutiny Over Teams Software: Report

Brussels is reportedly poised to unveil fresh antitrust allegations against Microsoft Corp MSFT concerning its videoconferencing platform Teams, signaling continued EU efforts to curb the market dominance of major tech firms.

The European Commission is advancing with formal charges, alleging that the software behemoth is impeding rivals in the sector, as reported by the Financial Times.

Microsoft’s recent efforts to stave off regulatory actions, including proposals to separate Teams from other software packages globally, failed to assuage EU concerns. 

EU officials contend that the concessions offered by Microsoft do not adequately address fairness in the market, the report mentioned. 

The commission’s scrutiny is fueled by fears that Microsoft might prioritize compatibility with its own products and manipulate pricing, thereby stifling competition and hindering data portability.

The impending charges mark an escalation in a dispute initiated in 2020 when Slack, now owned by Salesforce.com Inc. CRM, lodged a formal complaint against Microsoft’s Teams. 

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This development also terminates a decade-long truce between EU regulators and Microsoft, following prior competition investigations that concluded in 2013, with the EU levying a €561 million fine against Microsoft.

The timing of the charges could materialize in the coming weeks, the report added. Microsoft faces potential fines of up to 10% of its global annual turnover if found guilty of breaching EU competition law. 

The EU’s scrutiny extends beyond Teams, as it probes Microsoft’s $13 billion partnership with OpenAI for potential violations of competition laws. 

Additionally, Microsoft, alongside other tech giants like Alphabet Inc’s GOOGL Google and Meta Platforms Inc META, faces regulatory scrutiny under the Digital Markets Act, which designates them as “gatekeepers” with special obligations in the European market.

The tech company also faces grievances from European cloud computing providers, alleging abuse of dominance to promote its products and stifle competition from smaller startups in the region.

Microsoft stock has gained about 34% in the past 12 months. Investors can gain exposure to the stock via Technology Select Sector SPDR Fund XLK and IShares U.S. Technology ETF IYW.

Price Action: MSFT shares are trading higher by 0.69% at $417.59 in premarket at the last check Monday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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