The European Commission on Tuesday told Microsoft that it suspects the company may have violated anti-trust law by bundling its Teams messenger software with the Microsoft Office suite.
As the European Union's anti-trust enforcer, the commission objects to bundling when it believes a company is exploiting its dominance in one market to gain an advantage in another.
In this case, Microsoft is dominant in the market for what the commission calls "productivity software," meaning word processors like Microsoft Word and spreadsheet tools like Excel.
But the commission is arguing that Teams competes in a separate market for "communication and collaboration products," and that bundling it with Office is unfair to providers of standalone software in this other market - such as Slack, whose complaint prompted the commission to open an investigation on July last year.
The commission is also concerned about "interoperability limitations between Teams' competitors and Microsoft's offerings."
In a statement, Microsoft's Vice Chair and President Brad Smith said the company had "unbundled Teams and taken initial interoperability steps."
But the commission's statement said the EU executive "finds that these changes are insufficient to address its concerns and that more changes to Microsoft's conduct are necessary to restore competition."
Smith said: "We appreciate the additional clarity provided today and will work to find solutions to address the commission's remaining concerns."
The commission's objections are a preliminary opinion in an ongoing investigation, not a final judgement. There is no deadline for the commission to complete its investigation, but it could fine the company up to 10% of its global annual revenue and prescribe remedies if it concludes Microsoft broke the law.