BRUSSELS, June 25 (Reuters) - Microsoft ( MSFT ) faces a

hefty antitrust fine after the European Commission on Tuesday

accused it of illegally linking its chat and video app Teams

with its Office product, giving it an unfair advantage over

rivals such as Slack.

Eleven years after Microsoft's ( MSFT ) last EU fine, the EU

competition watchdog's latest action was triggered by a 2020

complaint from rival workspace messaging app Slack, owned by

Salesforce ( CRM ).

Reuters first reported in April that the EU was preparing

the charges.

The European Commission, which acts as the EU competition

watchdog, said Teams had been given a distribution advantage

while limitations preventing interaction between Teams'

competitors and Microsoft's ( MSFT ) offerings further hindered rivals.

"Preserving competition for remote communication and

collaboration tools is essential as it also fosters innovation

on these markets," EU antitrust chief Margrethe Vestager said in

a statement.

The U.S. tech giant had to pay 2.2 billion euros ($2.4

billion) in EU antitrust fines in the previous decade for tying,

or bundling, two or more products together and other offences.

It risks a fine of as much as 10% of its global annual turnover

if it is found guilty of latest alleged antitrust breaches.

The Commission said action Microsoft ( MSFT ) had taken did not

sufficiently address its concerns and that more changes were

necessary to restore competition.

The EU enforcer wants the company to sell Office without

Teams at a lower price than what it has announced, people with

direct knowledge of the matter said, while rivals want clearer

interoperability terms and more incentives for users to switch

to them.

Microsoft ( MSFT ) President Brad Smith reiterated comments made

earlier this month about the company's willingness to resolve

the issue.

"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.

Salesforce ( CRM ) President and Chief Legal Officer Sabastian Niles

urged the Commission to move towards a swift, binding and

effective remedy to restore a free and fair choice.

German rival and complainant Alfaview also welcomed the

Commission's charge against Microsoft ( MSFT ).

Teams was added to Office 365 in 2017 for free and it

subsequently replaced Skype for Business. Its popularity soared

during the pandemic due in part to its video conferencing but

rivals said bundling the products together gave Microsoft ( MSFT ) an

unfair advantage.

Microsoft ( MSFT ) in April separated Teams from Office globally to

try to resolve EU antitrust concerns and also made it easier for

rivals to function with its products but sources said the

unbundling was unlikely to appease regulators.

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