Slack has filed an anticompetition complaint against Microsoft in Europe, arguing that the software giant “illegally” bundles Teams into its omnipresent Microsoft Office product.
Microsoft launched its Slack-style enterprise communication Teams platform back in 2016, and the two companies have enjoyed some healthy rivalry. Slack even went so far as to take out a full-page ad in the New York Times telling Microsoft what it needs to do to succeed in the team communication sphere.
While both Slack and Microsoft Teams have benefited from the surge in remote working due to the COVID-19 crisis, Slack has officially filed a complaint with the European Commission (EC), asking it to take “swift action to ensure Microsoft cannot continue to illegally leverage its power from one market to another by bundling or tying products.”
While Slack is broadly available as a standalone service and application with various pricing tiers, Microsoft Teams comes as part of an Office 365 subscription, though a free version of Teams is available too. The crux of Slack’s complaint is that Microsoft is using its market dominance with Office to force millions of people to install Teams, with no way to remove it or even know how much it actually costs, since it’s bundled into a broader subscription.
Slack writes in its complaint:
Microsoft has illegally tied its Teams product into its market-dominant Office productivity suite, force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers.
There has been a slow but steady build-up to today’s news, with Slack CEO Stewart Butterfield often calling out Microsoft over the way it bundles Teams with Microsoft, as well as the way Microsoft defines its daily active users (DAUs) to highlight the product’s growth compared to Slack.
According to Microsoft, “active usage” is any action that takes place inside the Microsoft Teams app, including starting a chat, sharing a file, and making a video call — Microsoft Teams contains functionality such as Skype-like VoIP calling, meaning businesses may not always be using Teams as they would Slack. Butterfield has long argued that Teams is used primarily for voice- and video-calling, similar to Zoom, and that “Microsoft benefits from the narrative” that Teams is a direct competitor to Slack.
What’s perhaps most interesting is that Butterfield has recently gone on record as saying he doesn’t view Teams as a true competitor, yet Slack is now filing an anticompetition complaint against Microsoft. What Slack is really accusing Microsoft of here is using its power to kill Slack, which it said threatens Microsoft’s hold on an enterprise that is still largely reliant on email.
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“We’re confident that we win on the merits of our product, but we can’t ignore illegal behavior that deprives customers of access to the tools and solutions they want,” said Jonathan Prince, VP of communications and policy at Slack, in a press release. “Slack threatens Microsoft’s hold on business email, the cornerstone of Office, which means Slack threatens Microsoft’s lock on enterprise software.”
Slack has only filed a complaint for now — the next step will be for the EC to decide whether to open a formal investigation.
A Microsoft spokesperson told VentureBeat that it purposefully built Teams with both collaboration and video in mind because that is where demand lies, adding that this has been to Slack’s detriment.
“We created Teams to combine the ability to collaborate with the ability to connect via video, because that’s what people want,” the spokesperson said. “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.”
In truth, Slack does in fact offer video-conferencing functionality, though it’s perhaps not a core use-case for many users — plus it has inherent limitations. Slack offers one-to-one calling on its free version, a figure that rises to 15 participants on a paid subscription. Microsoft Teams, on the other hand, supports meetings of up to 250 people on its free version, while those on a paid plan can also host events and webinars with up to 10,000 virtual attendees.
“We look forward to providing additional information to the European Commission and answering any questions they may have,” the Microsoft spokesperson added.
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