Exclusive-Microsoft faces EU antitrust probe after remedies fall short, sources say

By Foo Yun Chee

BRUSSELS (Reuters) -Microsoft is likely to face a European Union antitrust investigation in the coming months after remedy discussions with the EU watchdog to avert such a move appear to have hit a roadblock, people familiar with the matter said.

Microsoft, which has been fined 2.2 billion euros ($2.4 billion) in the previous decade for practices in breach of EU competition rules, including tying or bundling two or more products together, found itself in the EU crosshairs after a complaint by Salesforce-owned workspace messaging app Slack in 2020.

Microsoft added Teams to Office 365 in 2017 for free, with the app eventually replacing Skype for Business.

Slack alleged that its rival had unfairly integrated workplace chat and video app Teams into its Office product. The company did not respond to a request for comment on Monday.

Microsoft kicked off talks with the European Commission last year in a bid to stave off an investigation. It recently offered to cut the price of its Office product without its Teams app.

The European Commission, which hopes a price differential between Office with Teams and Office without the app will ensure a level playing field with rivals and give consumers more choice, has been seeking a deeper price cut than that offered by the U.S. software giant, the people said.

The EU executive declined to comment.

A Microsoft spokesperson said: “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.”

The company, which risks a fine up to 10% of its global turnover if eventually found in breach of EU antitrust rules, could still improve its remedy before the watchdog kicks off an investigation.

($1 = 0.9147 euros)

(Reporting by Foo Yun Chee, additional reporting by Akash Sriram in Bengaluru; editing by Mark Potter, David Evans and Sonali Paul)