March 1, 2021

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Slack accuses Microsoft of anticompetitive practices in EU complaint

Stewart Butterfield, co-founder and CEO of Slack, waits to do a television interview after ringing the opening bell the New York Stock Exchange in New York on June 20, 2019.

Drew Angerer | Getty Images

Slack filed a complaint against Microsoft with the European Commission alleging anticompetitive behavior, the company said on Wednesday. 

Slack alleges that Microsoft abused its market dominance to eliminate competition for its Teams work communication product by tying it to its popular Office productivity suite. Slack claims that move meant millions were forced to install the app without the ability to remove it. Slack runs a service that competes directly with Microsoft Teams.

Slack’s stock was down about 1% Wednesday morning and Microsoft’s was slightly positive. Microsoft was not immediately available to respond to a request for comment. A spokesperson for the EU Competition Commission confirmed it received the complaint and said in a statement, “We will assess it under our standard procedures.”

The complaint stems from previous frustrations at Slack. CEO Stewart Butterfield told The Verge in an interview in May, “Microsoft is perhaps unhealthily preoccupied with killing us, and Teams is the vehicle to do that.” Still, Butterfield told CNBC earlier that month that “Teams is not a competitor to Slack,” even though a filing with the Securities and Exchange Commission names Microsoft as Slack’s “primary competitor.”

Microsoft has seemed to fly under the radar of antitrust authorities in recent years after the landmark case against the company brought by states and the Justice Department around the turn of the century. In that case, U.S. officials accused Microsoft of maintaining a monopoly by bundling its browser, Internet Explorer, to its Windows operating system. Prosecutors argued that this limited the marketplace for competing browsers on the Microsoft-owned OS.

Slack’s complaint seems to echo aspects of that earlier Microsoft case by claiming the company bundles its Teams product to its Office suite.

“Microsoft is reverting to past behavior,” Slack’s General Counsel David Schellhase said in a statement in the press release announcing the complaint. “They created a weak, copycat product and tied it to their dominant Office product, force installing it and blocking its removal, a carbon copy of their illegal behavior during the ‘browser wars.’ Slack is asking the European Commission to take swift action to ensure Microsoft cannot continue to illegally leverage its power from one market to another by bundling or tying products.”

Slack’s move to file its complaint in the E.U. is telling. Though both companies are based in the U.S., Slack is undoubtedly aware of the E.U.’s recent history of aggressive antitrust enforcement under Competition Commissioner Margrethe Vestager. Vestager has brought record fines against Google and has announced or is reported to be investigating several other major U.S. tech companies including Amazon, Apple and Facebook

Still, the complaint is likely to raise questions among U.S. antitrust authorities, whose investigations of the tech industry have been among the most closely watched. Microsoft hasn’t completely escaped scrutiny by U.S. officials, though it has certainly seen less attention than many of its peers. The Federal Trade Commission’s Office of Policy Planning included Microsoft in its review of past acquisitions in the tech industry, a project that is not part of its enforcement arm but could dig up potential enforcement issues.

This is breaking news. Please check back for updates.

-CNBC’s Steven Kopack contributed to this report.

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