Reports have emerged that Microsoft is to unbundle its Microsoft Teams video conferencing feature from it Microsoft Office suite.
A Financial Times report, citing sources close to the US Big Tech company, said that users will no longer be obliged to install Microsoft Teams along with the company’s Microsoft Office software. The report also outlines that Microsoft Teams will become an optional feature rather than making it separate.
The 2020 Covid-19 crisis and subsequent work culture shift towards remote working has created a highly competitive and lucrative market for enterprise video conferencing software. Microsoft has been accused of using its dominant software market advance to stifle smaller competitors including video conferencing software companies Slack and Zoom.
In 2020, Slack made a complaint to the European Commission accusing Microsoft of skewing competition by including its own video conferencing software, Microsoft Teams, within its Office suite.
At the time a spokesperson for Microsoft responded to the complaint by saying: “We are mindful of our responsibilities in the EU as a major technology company. We continue to engage cooperatively with the commission in its investigation and are open to pragmatic solutions that address its concerns and serve customers well.”
In November 2022, reports emerged that the European Commission was planning an antirust probe into Microsoft’s practices around bundling various features into the company’s suite of Office products, including Microsoft Teams.
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The European Union has exerted increasing regulatory pressure on US Big Tech companies, culminating in the implementation of its Digital Markets Act (DMA), which came into force in November, 2022.
The DMA seeks to identify ‘gatekeeper’ practices of large companies which provide platform services such as marketplaces, app stores, online search engines or cloud computing services in the EU. US Big Tech companies are largely the targets of the new regulation.
According to research analyst GlobalData, the consequences for Big Tech companies or ‘gatekeepers’ not adhering to DMA rules are severe – up to 10% of their global annual turnover for non-compliance. Such fines imposed on gatekeepers could result in unprecedented penalties, according to the analyst.
Repeated offenses by gatekeepers can result in a fine of up to 20% of global annual turnover and periodic payments of up to 5% of the company’s total global daily turnover. “Ultimately, if the gatekeeper continues to infringe on the DMA, the European Commission can compel the company to sell part of its business or even ban it from acquiring companies that provide it with services in the digital sector or services to collect data,” according to GlobalData.
Until Slack’s complaint to the European Commission in 2020, Microsoft had evaded the same level of regulatory scrutiny from European regulators as its Big Tech competitors Google and Amazon. For example, the company made the decision not to contest data localisation where governments mandated localising sensitive data within a country. While other Big Tech companies contested mandates to store data locally, Microsoft had essentially embraced GDPR as a business plan and made it a default position.
Microsoft’s regulatory woes are an integral part of the company’s origin story which eventually led towards becoming a dominant market player in the software industry. The infamous ‘browser wars’ of the 1990s saw the company locked in an existential battle with US competitor, Netscape, and included a decade-long antitrust investigation by the US Justice Department, which concluded in, September 2001, that it no longer sought the divestiture of Microsoft.