Slack takes legal route against ‘weak, copycat’ Teams

Slack Technologies has filed a competition complaint against Microsoft before the European Commission (EC) over the way it bundles its Teams collaboration tool.

Slack said its complaint concerns Microsoft’s illegal and anti-competitive practice of abusing its market dominance to extinguish competition in breach of European Union competition law. It claimed that Microsoft illegally tied its Teams product into its Office suite and forced “millions” to install it.

Slack has also claimed that Microsoft has prevented the removal of Teams and has hidden the true enterprise cost of licensing the software. 

“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. “We’re confident that we win on the merits of our product, but we can’t ignore illegal behaviour that deprives customers of access to the tools and solutions they want.”

According to Prince, Slack and Microsoft offer very different approaches to supporting ecosystems of software products that work well together. He said: “This is much bigger than Slack versus Microsoft – this is a proxy for two very different philosophies for the future of digital ecosystems – gateways versus gatekeepers.

“Slack offers an open, flexible approach that compounds the threat to Microsoft because it is a gateway to innovative, best-in-class technology that competes with the rest of Microsoft’s stack and gives customers the freedom to build solutions that meet their needs. We want to be the 2% of your software budget that makes the other 98% more valuable; they want 100% of your budget every time.”

After revamping and renaming its collaboration platform, in June, during the Build 2020 developer event, Microsoft unveiled an extension to its Teams platform, giving developers the ability to build and publish Teams apps from Visual Studio and Visual Studio Code.

At the time, Nick McQuire, head of enterprise and AI research at CCS Insight, said: “The market focus to date has been mainly as a meetings platform, but what we’re now seeing is Microsoft encouraging customers to think of it as a development platform as well.

“The Redmond company has been racing to integrate pieces across its portfolio over the past year, including its professional and low-code development tools, as well as its business applications.

“This integration remains a major area of investment for Microsoft because it brings Teams deeper into business processes as a principal source of differentiation against high-flying rivals like Google, Slack and Zoom.”

Microsoft has become a dominant force in enterprise IT by providing platforms on which developers can build third-party applications. This strategy has led to a number of run-ins with anti-competition authorities. In 2001, the US Department of Justice accused Microsoft of abusing its monopoly position by tying its Internet Explorer web browser to the Windows operating system.

In 2004, the EU commissioner for competitions, Mario Monti, found Microsoft had acted anti-competitively when the software giant tied its media player to the Windows operating system. In a speech about the ruling given in April 2004, Monti said: “By tying the sale of this product to the Windows PC operating system, Microsoft also sharply reduces competition and the incentive to innovate.

“There is significant evidence that the ubiquity which Microsoft gives the Windows Media Player makes developers of complementary content and software rely more and more heavily on Microsoft’s technology, thereby significantly foreclosing market access for alternative media players. This is achieved not through competition on the merits, where the best product or technology wins out, but simply because the product is integrated with the dominant operating system present in virtually every office and home PC.”

Slack said it is looking for fair competition and a level playing field that gives consumers greater choice. “Healthy competition drives innovation and creates the best products and the most choice for customers,” said David Schellhase, general counsel at Slack. “Competition and anti-trust laws are designed to ensure that dominant companies are not allowed to foreclose competition illegally. We are asking the EU to be a neutral referee, examine the facts, and enforce the law.

“Microsoft is reverting to past behaviour. 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 behaviour during the ‘browser wars’.”

That said, a Forrester total economic impact report, commissioned by Microsoft, found that many IT decision-makers prefer a single platform to trying to tie together multiple platforms.

“Consolidating onto a single platform means that multiple, incumbent solutions can be eliminated,” Forrester analysts wrote in the 2019 report. “This can include video-conferencing solutions, private branch exchange systems and other collaboration solutions. This also means lower complexity, which makes for easier security and compliance – 86% of survey respondents said Teams and Microsoft 365 has better privacy controls than other collaboration solutions.”

Slack is asking the EC to take swift action to ensure that Microsoft cannot continue to “illegally leverage its power from one market to another by bundling or tying products”.