The European Commission has initiated a formal investigation to determine whether Microsoft has violated EU competition laws by tying its communication and collaboration tool, Teams, to its widely used productivity suites, Office 365 and Microsoft 365.

Microsoft, a leading global technology company, offers a range of software solutions, including cloud-based tools for communication and collaboration. The COVID-19 pandemic has accelerated the shift towards remote work and cloud adoption, leading to increased competition in the market for such software.

The Commission's concerns center around the possibility that Microsoft is leveraging its dominant position in productivity software to restrict competition in the European Economic Area (EEA). Specifically, the investigation will assess whether Microsoft is unfairly granting Teams a distribution advantage by not allowing customers the option to exclude it from their subscriptions and whether it has limited interoperability with competing products.

If the allegations are substantiated, Microsoft's practices could be classified as anti-competitive tying or bundling, which may hinder other suppliers of communication and collaboration tools and negatively impact customers in the EEA.

The investigation is a response to a complaint filed by Slack Technologies, Inc. in July 2020, which accused Microsoft of illegally tying Teams to its dominant productivity suites. The Commission's inquiry will prioritize the assessment of these practices under Article 102 of the Treaty on the Functioning of the European Union (TFEU), which prohibits the abuse of a dominant market position.

The opening of this investigation does not imply any predetermined outcome, and the duration of the inquiry will depend on various factors, including the complexity of the case and the level of cooperation from the involved parties.