Workplace messaging software company Slack is accusing Microsoft of monopoly behavior in an antitrust complaint filed today to European Union regulators. Unsurprisingly, the accusations hinge on the same practice that helped make Microsoft rich in the first place.
Bill Gates, Windows, innovation, yes, yes, OK—undoubtedly Microsoft had a lot to contribute to the early years of home computing. But what helped it grow to mammoth scale was software bundling: specifically, the practice of getting its products pre-installed on brand new machines built by third parties—and making it hard to delete those programs and replace them with competitors.
You might remember this refrain from such hits as United States v. Microsoft Corporation, and Microsoft Corp. vs. Commission, the latter of which eventually cost the company over a billion dollars after it became “the first company in 50 years of EU competition policy that the Commission has had to fine for failure to comply with an antitrust decision,” according to the European Commission’s then-Competition Commissioner Neelie Kroes.
Kind of makes you wonder how Apple still gets away with setting Safari as the default browser on iOS devices, but I digress...
While those early cases against Microsoft focused on software like Internet Explorer and Windows Media Player, Slack’s new legal salvo concerns the company’s bundling of competing chat app Teams with its ubiquitous productivity suite Microsoft Office. In a press release, Slack accused its rival of “force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers,” which Slack believes to be an “illegal and anti-competitive practice.”
“We’re confident that we win on the merits of our product, but we can’t ignore illegal behavior that deprives customers of access to the tools and solutions they want,” said Jonathan Prince, vice president of communications and policy at Slack. “Slack threatens Microsoft’s hold on business email, the cornerstone of Office, which means Slack threatens Microsoft’s lock on enterprise software.”
Reached for comment, a Microsoft spokesperson sniped that “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.”
The merits of the case will be decided by the Commission, but the existence of the suit is a smart play for Slack, which has seen its stock slip recently, perhaps as a result of Teams’s encroachment on its market share. The EU has consistently had a greater appetite to pursue antitrust concerns compared to the U.S., where both companies are headquartered, making it a doubly clever play for the considerably smaller and more vulnerable party.