Microsoft (NASDAQ:MSFT) is contemplating stopping bundling its Teams video conferencing and messaging app with its highly popular Office software to avoid a formal investigation by the European Union (EU) regulators, the Financial Times reported. Microsoft is in talks with the regulators and sources cautioned that a deal is not certain.
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Anti-Competitive Practices
Rival instant messaging platform Slack, which was acquired by Salesforce (NYSE:CRM) in 2021, had filed an antitrust complaint against Microsoft in 2020, accusing the tech behemoth of unfairly bundling Teams with its Office productivity offering to hurt competition. Slack’s complaint came at a time when work-from-home became the norm and both Teams and Slack gained immensely from the pandemic-induced demand for remote working.
“Microsoft has illegally tied its Teams product into its market-dominant Office productivity suite, force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers,” alleged Slack.
Last year, EU antitrust regulator reportedly sent questionnaires to Microsoft’s rivals about the interoperability and bundling practices of the company.
Back in 2008, the European Commission accused Microsoft of misusing its dominant position to force users to download its Internet Explorer browser by bundling it with Windows, thus harming competition. The company settled the matter by agreeing to offer a choice of browsers to the user. However, in 2013, the EU fined Microsoft EUR 561 million for failing to abide by the agreement.
In a statement to the Financial Times, Microsoft said that it continues to cooperate with the European Commission in its investigation and is open to “pragmatic solutions” to address its concerns.
Is Microsoft a Good Stock to Buy?
Microsoft has been in the news of late due to its aggressive push in the artificial intelligence space. Wall Street has a Strong Buy consensus rating on MSFT stock based on 28 Buys, five Holds, and one Sell. The average price target of $306.95 suggests 9% upside. Shares have advanced over 17% since the start of 2023.
