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Freeman [soylentnews.org] writes:

https://arstechnica.com/tech-policy/2024/06/microsoft-risks-huge-fine-over-possibly-abusive-bundling-of-teams-and-office/ [arstechnica.com]

Microsoft may be hit with a massive fine in the European Union for "possibly abusively" bundling Teams with its Office 365 and Microsoft 365 software suites for businesses.

On Tuesday, the European Commission (EC) announced [europa.eu] preliminary findings of an investigation into whether Microsoft's "suite-centric business model combining multiple types of software in a single offering" unfairly shut out rivals in the "software as a service" (SaaS) market.

"Since at least April 2019," the EC found, Microsoft's practice of "tying Teams with its core SaaS productivity applications" potentially restricted competition in the "market for communication and collaboration products."
[...]
For Microsoft, the EC's findings are likely not entirely unexpected, although Tuesday's announcement must be disappointing. The company had been hoping to avoid further scrutiny by introducing some major changes last year. Most drastically, Microsoft began "offering some suites without Teams," the EC said, but even that wasn’t enough to appease EU regulators.
[...]
Microsoft will now be given an opportunity to defend its practices. If the company is unsuccessful, it risks a potential fine up to 10 percent of its annual worldwide turnover and an order possibly impacting how the leading global company conducts business.

In a statement to Ars, Microsoft President Brad Smith confirmed that the tech giant would work with the commission to figure out a better solution.

"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.
[...]
The EC initially launched its investigation into Microsoft's allegedly abusive Teams bundling last July. Its probe came after Slack and Alfaview makers complained that Microsoft may be violating Article 102 of the Treaty on the Functioning of the European [europa.eu] Union (TFEU), "which prohibits the abuse of a dominant market position."
[...]
Last March, the EC called [europa.eu] for stakeholder feedback after rolling out "the first major policy initiative in the area of abuse of dominance rules." The initiative sought to update TFEU for the first time since 2008 based on reviewing relevant case law.
[...]
Stakeholders had four weeks to submit comments. Among those providing feedback, however, was the US Chamber of Commerce (COC), which warned [europa.eu] that the EU's updated guidance didn't seem to adhere to case law and would "likely will reduce innovation and lead to higher prices for consumers" when it's adopted. Currently, that is set to happen during the fourth quarter of 2025, the EC's call for comments said.

According to the COC, the EU rushed the comment period and could have missed out on a "meaningful opportunity" to adequately weigh all valid concerns.
[...]
Just this week, the COC's fears seemed to be substantiated as the EC cracked down on Microsoft and Apple. On Monday, the Commission concluded that Apple may be violating the Digital Markets Act [arstechnica.com] by preventing "app developers from freely steering consumers to alternative channels for offers and content."

"The Digital Markets Act is another discriminatory measure that departs fundamentally from sound competition policy by creating rules without any linkage to actual effects or harm," the COC told the EC.

For Microsoft, the fear of repeat targeting or lowering the standard for enforcement is likely more concerning since Microsoft was already fined by the EU two decades ago over illegal bundling, Reuters reported [reuters.com].

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