Slack—the now-nearly ubiquitous, purple work-chatting platform—has filed a formal complaint alleging that tech titan Microsoft is unlawfully abusing its power to squeeze newer rivals out of the market—almost the exact same accusations Microsoft infamously faced 20 years ago.
San Francisco-based Slack filed a complaint with the European Commission detailing “Microsoft’s illegal and anti-competitive practice of abusing its market dominance to extinguish competition in breach of European Union competition law,” the company said today.
The complaint centers on Microsoft Teams, the company’s chat and video-conference platform. Teams is a competitor product not only to Slack but also to popular conference service Zoom, Google’s Meet and chat services, and other video services. Slack alleges that the way Microsoft bundles Teams into its distribution of Office—widely used enterprise software such as Outlook, Word, PowerPoint, and Excel—gives Microsoft an unfair advantage against the competition.
“What we are asking for is Teams be separated from the Office Suite and sold separately with a fair commercial price tag, so it competes on the merits with our products,” Slack’s general counsel, David Schellhase, explained. “Competition and antitrust laws are designed to ensure that dominant companies are not allowed to foreclose competition illegally.”
“Microsoft is reverting to past behavior,” Schellhase added, referring to a landmark US antitrust case against the company from the late 1990s. “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 does not necessarily have to investigate Microsoft just because Slack has filed a complaint. Based on the EC’s current strong interest in probing alleged anticompetitive behavior from tech companies such as Apple, Google, and Facebook, however, the commission seems primed to take the accusations seriously.
All of this has happened before…
When most people think about antitrust law, they think about monopolies being broken up. The last time a company in the United States was forced to break up, though, was January 1, 1984, when AT&T split into the seven regional “Baby Bell” phone carriers. (By the time 30 years had passed, all of those smaller firms had once again merged back into either AT&T or Verizon.)
But antitrust is about way more than just monopolies. It covers a whole range of anticompetitive behaviors. At the highest level, competition law basically says that it’s fine to be dominant in your market—but that it’s illegal to use that position to cheat or to bully other firms out of competing against you.
The last time the Department of Justice tried to break up a company, however, the conglomerate in the hot seat was… Microsoft. In 1998, the DOJ took Microsoft to court, alleging the company was behaving as an illegal monopoly and also that it was harming companies such as Netscape by unlawfully bundling its Internet Explorer browser with the Windows operating system.
In May 2000, the court ruled that Microsoft had indeed broken the law, and the next month, it ordered Microsoft to be broken up: one company to produce Windows, and another to produce all other Microsoft software, such as Office and IE. Microsoft all but immediately appealed and eventually won out, reaching a settlement with the DOJ in 2001.
That settlement avoided any breakups, instead requiring Microsoft to share its APIs with third-party companies. Internet Explorer remained the Internet’s most commonly used browser until Google’s Chrome finally surpassed it in popularity about five years ago. (Chrome itself now faces some of the same allegations of stagnation and anticompetitive behavior.)
“They want to kill us”
Just last month, The Wall Street Journal ran a deep dive into Microsoft’s Teams strategy, writing, “Microsoft’s Teams software gives it a hook to lure and keep customers for its broader portfolio of services based in the cloud, where companies increasingly store their data and run applications.” The paper went on to describe the relationship between Microsoft and Slack as “an especially intense feud.”
“They want to kill us, as opposed to have a great product and make customers happy,” Slack CEO Stewart Butterfield told the WSJ.