09:20 AM EDT, 06/25/2024 (MT Newswires) -- Microsoft ( MSFT ) breached European antitrust rules by bundling its Teams application with core Office 365 and Microsoft ( MSFT ) 365 product suites, the European Union's executive arm said Tuesday.

The European Commission informed the technology giant of its preliminary view that the company may have given Teams a distribution advantage by not letting customers choose whether they want it when they sign up for Microsoft's ( MSFT ) other software services.

The regulator launched its probe in July last year following a complaint filed by Slack Technologies, now owned by Salesforce (CRM), in 2020. Following the investigation, Microsoft ( MSFT ) said it will unbundle Teams from Microsoft ( MSFT ) 365 and Office 365 suites in European Union markets. The regulator said these changes are "insufficient" to address its concerns.

Microsoft ( MSFT ) has been tying Teams with its Office 365 and Microsoft ( MSFT ) 365 software applications since at least 2019, restricting competition for communication and collaboration products and defending its own dominant productivity software market position, according to the regulator.

"We are concerned that Microsoft ( MSFT ) may be giving its own communication product Teams an undue advantage over competitors, by tying it to its popular productivity suites for businesses," Margrethe Vestager, executive vice president in charge of competition policy, said in a statement. "If confirmed, Microsoft's ( MSFT ) conduct would be illegal under our competition rules."

The commission said it has no deadline to complete its investigation and could fine Microsoft ( MSFT ) up to 10% of its worldwide annual turnover, if it is ultimately found guilty of violating regulations. The regulator could also impose some remedies on the company to effectively end the infringements.

"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," a Microsoft ( MSFT ) spokesperson quoted Vice Chair and President Brad Smith as saying in an emailed response to MT Newswires.

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