Slack calls for EU probe into Microsoft over Teams bundling

Workplace software firm claims Microsoft has 'illegally tied' its videoconferencing software into the Office product suite

Slack Technologies Inc. urged European Union antitrust regulators to probe Microsoft Corp. for unfairly foisting its Teams collaborative software on millions of users.

“Microsoft has illegally tied its Teams product into its market-dominant Office productivity suite, force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers,” Slack said in an emailed statement on Wednesday.

The complaint escalates a fierce rivalry among videoconferencing and collaboration tools, amid exploding demand as the coronavirus pandemic pushed businesses to close offices and move to remote work. Teams vies with Slack and Zoom Video Communications for corporate customers.

Slack is asking the European Commission to take swift action to restore fair competition. It said it wants Teams to be sold separately from Office to compete directly with rival standalone products. It also complains that Microsoft has refused to provide interoperability information, hampering users who want to connect quickly from Slack to Microsoft calls or documents.

Microsoft looks forward “to providing additional information to the European Commission and answering any questions they may have”, it said in an emailed statement.

“We created Teams to combine the ability to collaborate with the ability to connect via video, because that’s what people want. With Covid-19, the market has embraced Teams in record numbers while Slack suffered from its absence of video-conferencing,” it said.

The complaint gives the EU another potential tech-giant target after fining Google billions of euros and starting new probes into Amazon  and Apple.

Microsoft spent decades battling antitrust regulators in the US and Europe over complaints that it unfairly tied products and blocked rivals’ access to the desktop Windows software used on most computers at the time. It hasn’t been under formal EU scrutiny since a 2013 fine for not complying with a pledge to offer a choice of web browsers.

The European Commission confirmed it received the complaint and said it will “assess it under our standard procedure”.

Slack general counsel David Schellhase told reporters that the company is also “having conversations with relevant US authorities”, adding it is not ruling out actions in other jurisdictions.

“Microsoft is reverting to past behaviour”, said Mr Schellhase in the statement. The company “created a weak, copycat product and tied it to their dominant Office product, force installing it and blocking its removal, a carbon copy of their illegal behaviour during the browser wars”.

San Francisco-based Slack licenses its workplace collaboration software to businesses, allowing users to instantly message or share files with a wide group of colleagues in an effort to cut down on email.

Investors had expected Slack to prosper from the boom in remote work but the stock fell as much as 19 per cent after the company in June withdrew its annual billings forecast, citing business uncertainty. That could signal the company isn’t confident it will benefit as much from the work-from-home era as investors expect.

Microsoft, meanwhile, has been putting pressure on Slack in recent years with its Teams product, which it bundles with its 365 productivity suite.

Locked in a growing rivalry, the two companies have been wrestling to add more features and gain more customers. In March, Slack simplified the design of its program in an effort to better compete with the Teams application, a day before Microsoft itself unveiled new features.

Microsoft said in March that Teams has 20 clients with more than 100,000 users apiece, and over 650 customers each with more than 10,000 users. Slack said in June it now has more than 122,000 paying customers, an increase of 28 per cent compared with a year earlier.

Despite the competition, Slack CEO Stewart Butterfield had said earlier this year it would work to integrate the Teams application on its platform because many large customers use Microsoft products.

EDITOR'S PICKS
NEWSLETTERS