Power

Slack: Break up the Microsoft Teams bundle and let us interoperate

In an antitrust complaint filed Wednesday with the European Union, Slack argued that Microsoft is unfairly bundling Microsoft Teams with Office 365 and demanded that other enterprise software companies should be granted greater access to its APIs.

Slack: Break up the Microsoft Teams bundle and let us interoperate

Slack wants the European Commission to separate Teams from the Office 365 bundle and require Microsoft to charge a price for Teams.

Photo: Michael Nagle/Bloomberg via Getty Images

Microsoft's refusal to let other enterprise software products and services integrate with Microsoft Teams, a very common practice in modern enterprise software, is a key part of Slack's European Union antitrust complaint against Microsoft, its lawyers said Wednesday.

Slack claimed that Microsoft is "abusing its market dominance to extinguish competition in breach of European Union competition law" in a press release outlining the complaint, pointing to the huge market share Microsoft enjoys for its Office 365 productivity suite in Europe. "Slack threatens Microsoft's hold on business email, the cornerstone of Office, which means Slack threatens Microsoft's lock on enterprise software," said Jonathan Prince, vice president of communications and policy at Slack.

Usage of Microsoft Teams has skyrocketed over the last six months, thanks in large part to the abrupt shift to working from home brought on by the pandemic. Slack has also grown during this period, but as of April, Microsoft said 75 million people are using Teams every day, while Slack counted 13 million "daily concurrent users" as recently as March.

Slack wants the European Commission to separate Teams from the Office 365 bundle and require Microsoft to charge a price for Teams, said David Schellhase, general counsel, during a press conference. It also plans to highlight what it called Microsoft's refusal to allow third-party software to interoperate with Teams, he said.

Slack, Box, Dropbox, Google and countless other enterprise software companies have made integration between their products a top priority, arguing that users want the freedom to integrate with different tools while still choosing the "best of breed" products that make the most sense for their businesses. But Microsoft has not agreed to provide the same level of API access to Teams that is otherwise common in the market, Schellhase said.

"Their public APIs are just enough to create a minimum product, but it's not enough to create the experience our joint customers want," Schellhase said.

For a significant chunk of users, Microsoft Teams is a forced migration from Skype for Business, a video calling and chat app that was still widely used until recently. Microsoft decided in 2017 to focus exclusively on Teams as its main communication and collaboration product, announcing plans to retire the online version of Skype for Business by the middle of 2021 and requiring all new Office 365 users to adopt Teams as of last September.

But Slack's lawyers argued that Microsoft is abusing its position in the office productivity market in bundling Teams for free alongside paid subscriptions to Office 365, an argument reminiscent of the U.S. antitrust case filed against Microsoft more than two decades ago. They also said, without providing the specific numbers they said were shared with the European Commission, that Microsoft's market power in other key areas of enterprise software — such as Microsoft Exchange for email and Microsoft Active Directory for employee identity management — incentivizes existing customers to choose newer products like Teams, especially if it's free.

"When you're looking at the impact of competition, of the tying behavior between Teams and Office and the related applications embedded in Office 365 and Microsoft 365, one must, as the European Commission surely will, take in account the wide picture of the market power of Microsoft in the enterprise software market," said Trevor Soames, a European intellectual property attorney representing Slack. "The whole thing is interconnected."

For its part, Microsoft said in a statement:

"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. We're committed to offering customers not only the best of new innovation, but a wide variety of choice in how they purchase and use the product. We look forward to providing additional information to the European Commission and answering any questions they may have."
Regardless of the merits of Slack's case, it's odd that Microsoft's official statement overlooks the fact that Slack does offer videoconferencing in its main product. Few would argue that service is Slack's best feature: Even Slack CEO Stewart Butterfield told Protocol earlier this year that Slack itself uses Zoom for internal videoconferencing, and Slack recently signed a deal with AWS to replace that internal video technology with AWS' Chime, but it's still there.
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