Microsoft hit with formal complaint over “monopolistic” software bundling

Nearly 30 tech firms have contacted the EU to voice concerns over bundling of OneDrive and Teams with Windows

Trade

29 November 2021

A coalition of EU-based tech firms has filed a formal complaint against Microsoft alleging anticompetitive conduct related to the bundling of its productivity apps with Windows.

German content collaboration platform Nextcloud is leading the complaint and is joined by nearly 30 additional companies in the software and cloud sectors.

The formal complaint has been filed to the European Commission’s Directorate-General for Competition and Nextcloud has also reported the coalition’s concerns to German antitrust authorities, the Bundeskartellamt.

The tech firms driving the complaint are against Microsoft’s “monopolistic” practice of bundling the likes of OneDrive, Teams, and other services with Windows 10 and Windows 11.

The companies claim the practice is pushing consumers to register for the services and hand their data over to Microsoft, stifling consumer choice and genuine market competition.

The coalition said Microsoft has grown its market share to 66% of the EU market in the last few years while smaller vendors have seen their shares shrink by as much as 26%.

“This is quite similar to what Microsoft did when it killed competition in the browser market, stopping nearly all browser innovation for over a decade,” said Frank Karlitschek, CEO and founder of Nextcloud. “Copy an innovators’ product, bundle it with your own dominant product and kill their business, then stop innovating.

“This kind of behaviour is bad for the consumer, for the market and, of course, for local businesses in the EU,” he added. “Together with the other members of the coalition, we are asking the antitrust authorities in Europe to enforce a level playing field, giving customers a free choice and to give competition a fair chance.”

Microsoft is currently the subject of an EU probe into its alleged anti-competitive practices, first brought to the Bloc’s attention more than a year ago by workplace collaboration company Slack.

Slack originally complained of Teams, Microsoft’s own workplace platform, and how it is bundled with the market-dominant Office 365 productivity suite illegally forced its software on users.

The complaint and resulting probe into Microsoft’s business is the latest development in a long-running feud between the two companies.

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