A Google executive has described Microsoft‘s concession to unbundle Teams from its Office suite as “too little, too late”.
Meanwhile, Bloomberg has reported that the European Commission will continue its antitrust investigation of Microsoft’s bundling of the two products after considering the concession insufficient.
Google executive Amit Zavery, Vice President, General Manager and Head of Platform at Google Cloud, spoke to The Register about why he believed the unbundling offer would be unworkable. Zavery cited the fact that it would only apply to the European Economic Area:
I don’t even know how Microsoft can justify this. The funny part to me, as a vendor, is to be able to say [to a customer with a] straight face, ‘You know what, we’ll do this for this particular country or region, and it’s the same issue for the rest of the world, but we will not do it for the rest of the world’… What’s the reason for that?”
As well as discussing the unbundling saga, Zavery also highlighted other Microsoft antitrust controversies. Zavery suggested that Microsoft’s bring-your-own-license (BYOL) policies either stopped customers from being able to process its software in a competitor’s infrastructure or made the cost of doing so extortionately expensive.
Several complaints were filed with the European Commission as a result. OVHcloud, DCC and Aruba SpA filed a joint complaint about the license cost policy with the EU’s antitrust authority in 2021, but Microsoft settled the case before it went to court in March this year. Another joint complaint was filed by a European cloud group which counted AWS among its members, alleging that Microsoft uses uncompetitive licensing practices to attract EU customers to its cloud infrastructure.
“I was meeting many customers this week,” Zavery said, “quite a few CIOs and others, and they’re still facing the same issues in terms of exclusionary licensing practices from Microsoft. They can’t move their existing licenses and have to pay a penalty or a tax to Microsoft(…) Microsoft has so much market power that they can decide(…) how the market will evolve based on their rules.”
The European Commission to Continue Its Investigation
Last month, Microsoft announced its intention to unbundle Teams from Office 365 in Europe after pressure from Slack and the European Union to avoid the European Commission’s recently announced probe into its allegedly anticompetitive practices.
Microsoft proposed to unbundle Teams from its inclusive software packages and sell them to new customers with an annual discount. However, for Microsoft customers, it is still more expensive to buy Office 365 and Teams separately compared to when they were bundled together.
However, late last week, Bloomberg reported that the Commission plans to proceed with its investigation and is preparing a statement of objections to send to Microsoft, which will likely come in the next few months.
The European Commission declined to comment on the subject, while Microsoft continued to underline its unbundling proposal.
Microsoft is also now under investigation by the European Commission following the introduction of the Digital Markets Act (DMA), which targets “gatekeepers” that offer “core platform services” and potentially undergo uncompetitive business practices. The Commission is exploring whether Microsoft’s Bing, Edge and Advertising services fall under the remit of the DMA. However, Microsoft has argued that Bing should not tied to the same regulatory conditions as Google as it has only a 3 percent market share.
Major Vendors Discussing the Antitrust Investigation in Public
Google hasn’t been the first major vendor with an executive discussing Microsoft’s antitrust investigation in public.
CEO Eric Yuan responded to Microsoft’s intentions to unbundle Microsoft Teams from Office 365 and Microsoft 365 subscriptions.
Yuan tentatively added to the discussion, suggesting that the US Federal Trade Commission (FTC), which enforces antitrust law in the States, should consider investigating similarly to the EU anticompetition body – although Yuan didn’t criticise Microsoft.
“No matter what, you’ve got to be fair,” Yuan said during a Goldman Sachs technology event. “You should ask this question to the FTC as well.”
