Slack Files EU Complaint Against Microsoft on Teams Software

Slack filed an EU complaint charging Microsoft with anti-competitive practice regarding the Teams software.
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Team-messaging company Slack Technologies  (WORK) - Get Report said Wednesday it had filed a complaint against Microsoft Corp.  (MSFT) - Get Report before the European Commission, charging the software giant with unfairly forcing its Teams collaborative software on millions of users.

Shares of Slack were down 4.2% to $31.88, while Microsoft was up slightly to $209.96.

Slack, the San Francisco provider of a collaboration platform, accused Microsoft, Redmond, Wash., of "illegal and anti-competitive practice" by abusing its market dominance to "extinguish competition in breach of European Union competition law." 

Microsoft, Slack charged, has illegally tied its collaboration software, Teams, into its Office suite, "force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers."

Microsoft Office includes Outlook, Word, Excel and PowerPoint.

“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,”  Jonathan Prince, Slack's vice president of communications and policy, said in a statement. 

“Slack threatens Microsoft’s hold on business email, the cornerstone of Office, which means Slack threatens Microsoft’s lock on enterprise software.”

The European Commission will review the complaint, Slack said, and decide whether to open a formal investigation into Microsoft’s anti-competitive practices.

A spokesperson for Microsoft, which is scheduled to report fourth-quarter earnings Wednesday, said in an email 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," the spokesperson said. "We look forward to providing additional information to the European Commission and answering any questions they may have.” 

David Schellhase, Slack's general counsel, said that “Microsoft is reverting to past behavior."

"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,'" he said. Schellhase referred to a 1990s legal battle involving Microsoft's Internet Explorer and Netscape's Navigator.

In that case, Microsoft reached an agreement in 2001 with the U.S. Department of Justice to settle the government's antitrust case.

In June, Slack reported first-quarter sales that beat forecasts, but withdrew its full-year guidance for so-called calculated billings.