Slack today filed an antitrust complaint against Microsoft for bundling Microsoft Teams with Office 365. Slack wants Microsoft to sell Microsoft Teams separately to enterprise customers.
“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,” Slack said in a statement.
European Commission has confirmed that it has received a complaint from Slack against Microsoft Teams.
“We confirm that we received a complaint by Slack against Microsoft. We will assess it under our standard procedures.”
In an interview with Fox Business Slack CEO Steward Butterfield said that he is not impressed with Teams. He also said that Microsoft Teams is “not competitive” with Slack. Butterfield said the two products were “fundamentally different”, portraying Teams as mostly a video conferencing platform while Slack was a channel-based communication medium designed to replace email.
While Microsoft Teams has announced 75 million daily active users in April this year, Butterfield refused to update their last released DAU numbers, which was a mere 12 million in October 2019. Butterfield instead boasted gaining 12,000 paying customers in the last quarter, more than twice as many as the previous quarters.
Read Slack’s full blog post regarding the complaint below.
SAN FRANCISCO, July 22, 2020—Slack Technologies, Inc., (NYSE: WORK) today announced it has filed a competition complaint against Microsoft Corporation before the European Commission.
The complaint details Microsoft’s illegal and anti-competitive practice of abusing its market dominance to extinguish competition in breach of European Union competition law. 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.
“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.”
“But this is much bigger than Slack versus Microsoft – this is a proxy for two very different philosophies for the future of digital ecosystems, gateways versus gatekeepers,” Prince said. “Slack offers an open, flexible approach that compounds the threat to Microsoft because it is a gateway to innovative, best-in-class technology that competes with the rest of Microsoft’s stack and gives customers the freedom to build solutions that meet their needs. We want to be the 2% of your software budget that makes the other 98% more valuable; they want 100% of your budget every time.”
“Slack simply wants fair competition and a level playing field. Healthy competition drives innovation and creates the best products and the most choice for customers. Competition and antitrust laws are designed to ensure that dominant companies are not allowed to foreclose competition illegally. We’re asking the EU to be a neutral referee, examine the facts, and enforce the law,” said David Schellhase, General Counsel at Slack. “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.’ 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.”
The European Commission will now review the complaint and decide whether to open a formal investigation into Microsoft’s anti-competitive practices.