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Slack accuses Microsoft of anti-competitive behaviour

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Workplace communications company Slack has filed a complaint in the EU, accusing Microsoft of anti-competitive practices to benefit Slack competitor Microsoft Teams.

Slack claims that Microsoft bundling the Microsoft Teams product into Office 365 is an illegal and anticompetitive practice. According to Slack, Microsoft has been “force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers”.

“We’re confident that we win on the merits of our product, but we can’t ignore illegal behaviour that deprives customers of access to the tools and solutions they want,” said Slack VP for communications and policy, Jonathan Prince. “Slack threatens Microsoft’s hold on business email, the cornerstone of Office, which means Slack threatens Microsoft’s lock on enterprise software.”

Prince said that Slack’s “open, flexible” approach is seen as a threat by Microsoft because it is a gateway to other alternative digital  tools which compete with Microsoft’s software bundle: “We want to be the 2 per cent of your software budget that makes the other 98 per cent more valuable; they want 100 per cent of your budget every time.”

Slack general counsel David Schellhase said that the company is simply seeking a level playing field, and added: “Microsoft is reverting to past behaviour. They 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'.

“Slack is asking the European Commission to take swift action to ensure Microsoft cannot continue to illegally leverage its power from one market to another by bundling or tying products.”

The controversial practice of bundling software – and specifically restricting customers’ ability to remove and replace this software – is arguably a major part of what made Microsoft into the tech giant that it is today. Microsoft has fought major legal antitrust cases in the US and EU over this practice; in both cases, Microsoft was found to have abused its dominant position in the market.

The European Commission will review Slack’s complaint and decide whether to initiate its first formal investigation into Microsoft’s practices since 2008. If an investigation is opened, Microsoft could face the possibility of serious penalties; the EU competition commissioner Margrethe Vestager has been a trailblazer in reining in the behaviour of US tech giants like Google and Apple, including with multibillion-euro fines.

In a statement to media, Microsoft said: “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. We’re committed to offering customers not only the best of new innovation, but a wide variety of choice in how they purchase and use the product.

“We look forward to providing additional information to the European Commission and answering any questions they may have.”

The dispute comes as the coronavirus pandemic has forced people all around the world to work and socialise remotely, relying heavily on workplace communications services such as Slack, Google Meet, and Microsoft Teams.

Slack has grown rapidly this year, reporting a 50 per cent year-on-year jump in sales between February and April. It recently announced an expanded partnership with AWS and the acquisition of Rimeto, an enterprise directory service. However, it remains locked in a battle with Microsoft Teams, with Teams surpassing Slack in user numbers last July.

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