Background: abuse of dominance

Article 102 of the Treaty on the Functioning of the European Union (TFEU) (and the national equivalents thereof) prohibits companies from abusing a dominant market position. A company is dominant when it holds such market power that it can operate independently of competitors, customers, and ultimately consumers (please also refer to our earlier blog).

A form of abuse of dominance is tying and bundling. This occurs when a dominant company makes the use or purchases of one product (“the tying product”) conditional on obtaining another product (“the tied product”). Such practices may restrict consumer choice and foreclose competitors who cannot match such distribution advantages.

Microsoft abused its dominant position by tying Teams to Microsoft’s other applications

In 2023, after complaints from Slack Technologies (now owned by Salesforce) followed by subsequent complaints from Alfaview in 2024, the Commission opened an antitrust investigation to assess whether Microsoft was abusing its dominant position. The Commission came to the preliminary finding that Microsoft tied its communication and collaboration tool Teams with its Office 365 and Microsoft 365 productivity suites, including apps such as Word, Excel, PowerPoint and Outlook.

According to the Commission, this tying strategy gave Teams an unfair competitive advantage in entering and quickly gaining a strong position in the market. This advantage was reinforced by interoperability limitations between Microsoft’s productivity applications and tools of its competitors.

The investigation led to the preliminary conclusion that Microsoft:

  • holds a dominant position in the market of Software-as-a-Service (SaaS) productivity application for professional; and
  • since 2019, was abusing this dominant position by Teams with its productivity applications, in breach of Article 102 of TFEU and Article 54 of the Agreement on the European Economic Area.

In response, Microsoft initially introduced changes to the way it distributed Teams, such as offering customers versions of its productivity suites without Teams for a reduced price. However, the Commission deemed these changes as insufficient to end the tying practice.

Commitments to address the Commission’s concerns

In order to prevent a significant fine – which could have reached up to 10% of the company’s annual global turnover – Microsoft amended its initial proposal and offered revised commitments in May 2025, which comprise:

  1. offering versions of Office 365 and Microsoft 365 without Teams at an appreciably lower price;
  2. giving customers recurrent opportunities to switch to suites without Teams;
  3. ensuring interoperability for key functionalities between tools that compete with Teams and Microsoft products; and
  4. allowing users to export their Teams messaging data for use in competing solutions.

Further compliance

Microsoft must comply with these commitments for a period of seven years, with certain obligations such as those concerning to interoperability and data portability extending to ten years. A monitoring trustee will oversee the implementation and report regularly to the Commission. Failure to comply will trigger enforcement measures by the Commission, who may impose:

  • a fine of 10% of Microsoft worldwide annual revenue, without needing to prove an infringement of EU antitrust rules, or
  • a periodic penalty payment of up to 5% of its daily turnover for each day of noncompliance.

Commission’s enforcement strategy

According to the Commission, the decision opens competition in the market of communication and collaboration products but also underlines the effectiveness of instruments like soft enforcement. Executive Vice-President for Clean, Just and Competitive Transition, Teresa Ribera, noted:

“This decision shows that our soft enforcement approach can be particularly important in digital markets, where new products and integration strategies often challenge the boundaries of regulation. So, we need quick and cooperative interventions”.

The Commission’s case against Microsoft is part of a broader regulatory strategy to ensure fair competition in digital markets. In addition to tradition competition law, the EU has recently introduced crucial legislation including the Digital Markets Acts (DMA) and the Digital Service Act (DSA) (please also refer to our earlier blog).

What’s next?

This recent case shows the EU is putting Big Tech companies under scrutiny while trying to avoid unnecessary restrictions. The acceptance of commitments may be seen as a cooperative resolution that benefits Microsoft as well as its customers. For Microsoft, the commitments offer a way to potentially avoid a multi-billion fine, but they still come with long-term restrictions and increased regulatory oversight. The foregoing also illustrates that it may be advantageous for a competitor to engage with the authorities.