Slacks Files Antitrust Complaint Against Microsoft

Posted on July 22, 2020 by Paul Thurrott in Microsoft, Microsoft 365 with 71 Comments

Slack today filed a competition complaint against Microsoft Corporation before the European Commission, alleging that the software giant has abused its market dominance using illegal and anti-competitive business practices.

“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,” Slack vice president Jonathan Prince said in a prepared statement. “Slack threatens Microsoft’s hold on business email, the cornerstone of Office, which means Slack threatens Microsoft’s lock on enterprise software.”

Slack CEO Stewart Butterfield has been whining publicly about Microsoft Teams since its inception, arguing even as Teams overtook Slack that it was no competition to his company’s only product. But with Slack’s latest financial results disappointing investors—unlike other messaging firms, Slack hasn’t experienced explosive growth during the COVID-19 pandemic—the firm has clearly decided that it was time try the antitrust angle.

And given the antitrust investigations we’re now witnessing against Amazon, Apple, Facebook, and Google, it’s interesting to consider the merits of Slack’s complaints within the confines of the enterprise market. Does Microsoft “dominate” this market, which is not illegal, and has it wielded this power illegally?

According to Slack, Microsoft plays a gatekeeper role to its “stack” (I’d call it “ecosystem”) and wishes to be “100 percent of your software budget.” Slack, the complaint notes, just wants “2 percent.” But Microsoft’s ecosystem, such as it is, is open: There’s no barrier to entry, and Microsoft—unlike Apple on iOS—doesn’t command a vig, or fee, or any kind whenever other firms make money in this market.

What Microsoft has done, of course, is observe the success of Slack and then determine that the right course of action was to build its own competitor rather than purchase Slack and convert it into a Microsoft offering. But Microsoft Teams, which started as a Slack competitor, has long since took on much unique functionality that Slack doesn’t offer and is a platform in its own right. Teams is not “a weak, copycat product,” as Slack alleges, it is a superset of the functionality that Slack provides. Microsoft has simply out-Slacked Slack.

As to how Microsoft “forecloses competition illegally,” as the Slack complaint alleges, it is correct that Microsoft has “tied [Teams] to their dominant Office product,” by which it means that Teams is part of its broader Microsoft 365/Office 365 offerings. But it also says that Microsoft “forces installs” Teams and “blocks its removal,” which it says is “a carbon copy of their illegal behavior during the ‘browser wars.’” When Microsoft “illegally leveraged its power from one market to another by bundling or tying products.”

The European Commission says it will review the complaint and decide whether to open a formal investigation against Microsoft.

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Comments (78)

78 responses to “Slacks Files Antitrust Complaint Against Microsoft”

  1. codymesh

    Slack, in a full-page ad buy in the New York Times on 2 November 2016:


    So welcome, Microsoft, to the revolution. We’re glad you’re going to be helping us define this new product category. We admire many of your achievements and know you’ll be a worthy competitor. We’re sure you’re going to come up with a couple of new ideas on your own too. And we’ll be right there, ready.


    lol. Good times.

  2. wright_is

    And Microsoft has been doing this type of product for, what, 20 years? They bought Skype and then Lync, which begat Skype for business, which begat Skype for business online which begat Teams.

    • sandy

      In reply to wright_is:

      Not quite:

      Lync and Lync Online were rebranded to SfB & SfB Online.

      Lync Online existed before MS bought Skype.

      Lync/SfB's previous names were Microsoft Office Communicator/Office Communications Server, and originally Live Communication Server. I believe MS created LCS/OCS/Lync in-house, as opposed to buying it.


      If - as has been reported elsewhere - Slack is suggesting Microsoft illegally tied Teams to Office 365, they're outright wrong. Teams is built on O365 and can't work without Exchange Online, SharePoint Online,


      While Microsoft Teams is taking over the former Lync/SfB Online communications functions, Teams is much more, and has been built on the existing Microsoft Office 365 cloud platform. For example it has pieces in Azure Active Directory & Exchange Online (and not just for e-mail notifications, i.e. Office 365 Groups, conversations are stored in ExO Team mailboxes), Teams' document/file storage is SharePoint Online, and the voice & video was built on the Lync Online platform (although it's diverging).


      (And I'm not particularly a fan of Teams; I think the desktop client is clunky, the UX isn't great and it's already becoming bloated.)

  3. Usman

    But it also says that Microsoft “forces installs” Teams and “blocks its removal,” which it says is “a carbon copy of their illegal behavior during the ‘browser wars.’”


    Oh Slack, if only they knew that you would actively have to use teams. Many businesses have it and product like teams requires the users to actively choose it and utilise it.

  4. navarac

    Might sound like sour grapes by Slack, at first, but how long before Teams becomes another "was a thing Microsoft did"? Just a thought.

  5. igor engelen

    I don't really see a problem here.

    Just like Skype replaced Lync, Teams is now replacing Skype. And the fact that it's bundled in o365 is just for convenience. It's everything you need to do 'office work' now.

  6. anoldamigauser

    Never would have happened if Microsoft had bought them and let Mr. Butterfield retire on the beach.

    I believe that Slack's biggest problem, especially during the pandemic, is that a good portion of their clients can use the free tier for what they need. Their natural clientele is small business, and small business is not necessarily doing well at the moment.

    Consider a firm that wants to use G-Suite ($6/month), Zoom Pro ($14.99/month), and Slack Standard ($6.67/month)...and suddenly Microsoft 365 Business Standard, at $12.50/ month looks a lot more appealing, and that is compared to the most basic Slack offering. Even if you take Zoom out of the mix, it is competitive. If you can get by with Business Basic at $5/month it makes it a no-brainer. Add to that, the fact that using a single provider gives you "one throat to choke" when dealing with problems.

    Being large is not a crime...then again, anti-trust in the EU is based on competition. I still think there is probably not much to Slack's case.

    What Slack needs is for Google to purchase them. If Google decides to build a competing product as well, then it is game over for Slack.


  7. Maciek

    The problem with Teams is that it's beginning to be huge. And I don't mean the market, I mean the app. Slack remains simplistic, has an almost IRC vibe. For smaller companies like mine, an easy to manage group chat service with channels and private messaging is all we need. Teams is getting complicated.

    • wright_is

      In reply to Maciek:

      I've been doing Teams training for the last 3 months. It takes about 45 minutes to an hour to go through the basics.

      If the user has never used Skype, WhatsApp or something similar, it takes even longer. And each month new features are added. I've added a dedicated Team, where I just announce and describe the new features as they are released.

  8. mejason83

    Wait, if I remember correctly "“What we’ve seen over the past couple of months is that Teams is not a competitor to Slack,”" Everyone could see the writing on the wall that Teams being included with 365 was going to burn Slack. Its not the same as Slack, but for many its good enough.




  9. wright_is

    If you have m365 and you tell the installer, that Teams should not be installed, it installs it anyway. If you deinstall it, it reinstalls next boot. It also defaults to starting when the user logs on.

    in the end, we set a rule in our AV software to block the Teams executable and the Teams installer. The block is then removed, when a user signs up to use Teams - because of GDPR, our Data Protection Officer won't let anyone use Teams, unless they sign a waiver to allow us to use their name in the MS cloud. Users that don't sign just get Office local installation, no additional services and a random number username that can't be linked to a real name.

    • beckoningeagle

      In reply to wright_is:

      If you uninstall the "Teams Machine-Wide Installer" then it stops installing after every reboot. You can also create a customized installer for Office 365 using the Office Deployment Toolkit which excludes Teams. I understand you point though, it does gets automatically installed with M365, and I believe that is what Slack's CEO alludes to. I still don't think this is an anti-trust issue.

  10. will

    Zoom and Slack should get together and merge. Both need each other and then it would be something that could take on Teams.

    • IM
    • Team discussions
    • Collaboration workflows
    • Phone System
    • Video calls
    • Ease of use
    • Work with 3rd parties
    • IanYates82

      In reply to will:

      You're not wrong


      However, they also need good files integration - dropbox or box in the middle? OneDrive for business / SharePoint is pretty key to what we do with Teams as well. Auto-sync of files, grouped by channel, is really handy.

  11. Chris_Kez

    Maybe Dropbox should file a complaint over the inclusion of OneDrive as part of M365.

    ?

  12. RonV42

    Teams has replaced 90% of our telephony and the only area in the company still using a pbx type environment is call centers for obvious reasons. Having everything you do in the video conference being preserved in a single location is the best feature for me. I don't have to hunt down chat logs, white boards, and video / audio recordings, download, and upload into another system.

  13. wright_is

    Our experience with Teams so far is that the sales and purchasing departments use it heavily to have video conferences with external contacts (customers or suppliers). About 10% is internal video telephony and around 2% is messaging back and forth.

  14. prifici

    Admittedly I don't know a lot about antitrust law, but this seems very much like sour grapes by Slack. They seem to be obsessed with Teams and Microsoft...

  15. geoff

    Every time someone makes the argument that a competitor . . . "gives their product away for free, which hurts competition" I think of Linux, which openly and proudly does exactly that.


    How many start-up companies have entered the OS market in the last 30 years?

    None. They can't enter that market because there is a free alternative, and the regulators don't care.


    The EU usually is the first in the queue to halt that kind of anti-competitive behavior, but they take to opposite view with Linux - often trying to mandate that some local government area switches to using Linux (for a while, until they realize it's not very good).


    I'm no lawyer, but 'unfair competition' laws seem to always miss the major breaches and focus on the minor ones.


    BTW: Teams is just the 'new' Skype for Business (formerly Lync, formerly Office Communicator, etc, etc.) . Microsoft forces Teams to corporate Office 365 customers so that they can retire S4B. That's annoying (in some ways I preferred S4B) but not evil. Far from it.

    • nbplopes

      In reply to Geoff:


      If you have a dominant position in a market and you bundle new products for free that aim to target core and successfull products of your competition of course it hurts badly. The smaller that competition the worst it gets.


      Why Google hasn’t done it too? Well it has regulators breeding over their neck.


      The argument that is all about adding value is nothing specific.


      Imagine Apple Music for some reason was bundled free with the iOS all expenses payed by other products. Of course it would be adding value, but that is not at the core of such measure.


      There is no way around of this fact.


      I am not arguing that this is illegal. Just arguing that it does stiff competition, quality and innovation.

      • Paul Thurrott

        Google has done it too. It just integrated Meet into Gmail.
        • nbplopes

          In reply to paul-thurrott:


          Humm, Teams is like Skype as much as Slack is like Zoom ... well for now as it seams that MS wants to catch two fish with a stone. Skype was integrated in the Office 365 a long time.


          Still I believe that its a question of time Google launch a Slack tool like MS did and integrate it into their Suite. I suspect the reason why they haven’t done it before is partially because of the above regulation concerns ... hey they can always buy Slack now :)


          A note on quality. I’ve been using a Desktop as the main workstation and the iPad Pro has a mobile companion device. I was talking with someone about how great this combination is working for me and he said that it could not use it. He had many many meeting and discussion online and was using Teams and the iPad Pro support for teams was really bad. I could not believe it was and returned testing it out again, and ... actually was that bad, even uploading and removing files was not working. I just told him that with Slack did not had that problem even in the free version. He told, me that his company was using Teams because it was bundled so ...


          The truth is at this level, the quality of ones product even if way better its just one component and it might not even be the most important. It becomes about leverage.


          And when one of these companies applies it ... only very few can compete if not bought.


          If MS was split it’s software conglomerate back in the day between OS business and Office business ...., I honestly doubt that the only option for Google to get into the productivity business was offering it for free and leverage this business on Ads and probably my friend would not have such difficulties with Teams on the iPad Pro as it would need to compete without such a huge leverage.

    • jackwagon

      In reply to Geoff:

      I know there was actually some guy named Daniel Wallace who tried to sue the FSF over Linux being free. He wound up having to pay their court costs. Then, he tried to sue IBM, Novell, and Red Hat, but he wound up losing in these cases as well (even taking it to the Court of Appeals for the Seventh Circuit and having his case dismissed there).


      Even beyond this, I don't know how much demand there would really be for a new general-purpose operating system. In order for that to change, you'd probably need to have some new way of doing things that 1) wouldn't work on current operating systems and 2) couldn't be made to work on current operating systems without significant modifications to the OS.

  16. MikeCerm

    I do think that Microsoft has been overly aggressive in both auto-installing and auto-launching Teams on log-on, putting an icon on the desktop. I mean, they don't auto-launch Outlook or put an Excel icon on the desktop. That being said, I don't really feel that bad for Slack. If you have a good product, people will buy it. I have clients that use G Suite for email and insist on using Office 365 desktop apps. It would be far cheaper if they would just move their email over to Office 365, but they love Gmail. If Slack is better than Teams, people will buy it. Microsoft does not have an office/productivity monopoly, or anything close to one. G Suite exists, LibreOffice exists... People who choose Office choose Office because they choose it, not because they have to. People think they're doing Teams to crush Slack, but it can also be viewed as an answer to whatever Google is doing with Hangouts/Meet.

  17. nbplopes

    It’s kind of a bummer when you define a product category only to see someone else fully subsidizing a competing one. I mean, MS has been bundling a lot of stuff with Office this way .. effectively eliminating the competition In the productivity space for decades.


    The truth is, if companies had to pay for teams alone ... I wonder ...


    I mean, if a company is already subscribing to Office 365 for business, Teams was bundled for free! I consider both Slack and Zoom superior quality, but still ... very little can compete with “free“. So if my mantra is to reduce costs .... Teams would never have survived if its value stood on its own shoulders, never. For one, outside Windows, including mobile and tablets, its experience is appalling comparatively.


    The entire Office Suite is full of in app Ads to use Teams.


    MS is doing the same with Zoom by the way.


    If this is legal or not ... have no idea. But it does stiff innovation and competition. Maybe that is way the Windows Store is a wasteland of devs.

  18. davehelps

    How much of this debate is based on Teams being new-ish?


    If I create Dave’s Word Processor 1.0, can I complain that Microsoft is exploiting the fact that people who need Excel also need a Word Processor?


    Office is a suite. But _nobody_ in publishing uses Publisher, do they? Even though they all have it, they prefer Adobe’s product.


    Would Slack be happy if MS went back to only bundling Skype for Business? Is the decisive factor really that Teams is _good_??

  19. toukale

    In reply to Winner:

    Exactly... its the reason I don't pay attention to those talks, I can see for myself what's really going on. Fact of the matter is, when you get to that size and have as many products as those companies offers, you are going to run foul of those rules, there is no way around it. Every big corporation does this, but some are happy to point flaws in the companies they don't like while ignoring what the home team is doing.

  20. kd5hiy

    I am a much bigger fan of Slack over Teams still, but this... this is just dumb.

  21. ebraiter

    Here we go again. A company using the courts to fight their own battles.

    I know that Slack lost out on a huge 75,000 seat to Teams earlier this year.

    Both of them were tested by users and Teams won.

  22. bart

    One could argue that MS is undercutting Slack by tying it to Office and at the same time, not raising the price of Office 365 to pay for Teams. This is like Amazon undercutting anyone in retail, by using its market dominance. I am just spit balling here, but I am not convinced the EU will brush this aside.

    • Paul Thurrott

      Sure. But does Office 365 have some kind of market dominance? Leveraging isn't illegal. Neither is dominance. Are they doing both? I'm not sure.
      • Pungkuss

        Yes! Yes it does Paul. I have watched you make fun of how tiny the other players in the Office 365 market was, you can't now say they are not dominant. By adding a product to that for free is illegal. This is why I wanted Microsoft to STFU with these testimonies and paying to form groups to petition for anti-trust in EU against Google. Dude! you have your own monopoly and in the EU the policy is innovation by legislation. You are opening Pandora's box by bringing them in.
        In reply to paul-thurrott:


        • evox81

          In reply to Pungkuss:

          There was already a collaboration tool included in Office 365. I view Teams less as a free addition and more as a free upgrade.

          • Pungkuss


            Wasn't Instagram stories just a free upgrade to Instagram. Isn't Instagram allowed to get better for all the users there. Again these are not problems IF you are not a monopoly, and Office is a monopoly. They do negatively effect the customer/consumer, but the EU does just go with the consumer harm doctrine that the US does. The EU considers competition as a whole.
            Microsoft was never a bad company regardless of what Paul says. Microsoft/Google/Facebook/Amazon/Apple are not good/bad companies. If you and I got rich we would try to protect our money too. Microsoft looks like its changed because windows is no longer a monopoly that needs to be protected. The true monopoly is Office and thus it needs to be everywhere now. Its kinda like when Google was telling everyone how open they were.... Yeah with the stuff that doesn't make you money.
            I argue that Office was more than little bit responsible for the success of Azure. The more you can make thing work well with Office the more successful those thing will be. I don't think its fair to think of these large corporations as good/bad, its better to ask why. Very rarely is the answer because they wanna do good by their customers alone.
            The thing Paul does well is that he tries to see where other companies are coming from. He can see why this would suck for Slack. No matter how good the product is, they will probably lose because people need Office, but are willing to live with a close enough product (Teams) that's free.
            In reply to evox81:


      • bart

        In reply to paul-thurrott:

        Good points. Plenty of Office alternatives available as well and MS is not blocking Slack in any way either. Still, these things often don't follow logic...

    • skolvikings

      A person can use Slack on a computer running Windows 10, using the Microsoft Edge browser, or using the Slack app available in the Microsoft Store. Also, other Teams competitors have apps that can be integrated into Teams. For example, you can tie your Zoom and M365 accounts together and schedule Zoom meetings from inside a team. There's similar functionality for Cisco WebEx. I bet Microsoft would work on some type of integration with Slack too if they were receptive to the idea.


      This doesn't look like illegal behavior on Microsoft's part.

    • mejason83

      In reply to Bart:
      Just like @lvthunder mentioned "So at what point do you say to a company you can't add any more value to your product?"


      Slack Right now...



  23. lvthunder

    Of course the EC will open an investigation. Anytime they can go after an American company they will.

    • wright_is

      In reply to lvthunder:

      Not really, just many large US companies seem to have a penchant for ignoring EU law and acting all hurt, when they are called out.

      and it isn't as if they don't go after EU based companies doing the same sort of things.

      Philips got stung for illegal cartel practices a couple of years ago, for example.

  24. jbinaz

    Does Microsoft "force install" Teams? Even if they do, I just checked, and I can right-click and choose "Uninstall" on the icon.


    Seems like Slack is getting their lunch handed to them and doesn't like it.

    • beckoningeagle

      In reply to jbinaz:

      You need to uninstall 2 components. Microsoft Teams and "Teams Machine-Wide Installer". The Teams app runs in user space, meaning that it is not installed per machine like most other software. It gets installed in "%APPDATA%MicorosoftTeams" which is a folder in each user's profile. If you do not uninstall the second item I mentioned, Teams may get re-installed whenever another user logs in. It is also automatically installed by Office 365 unless you use the Deployment Toolkit to create a personalized Office installer.


      Having said this, I do not think the forced installation is a big deal, they don't make you use it and they have fixed the issue that you can't uncheck the "load with Windows" without loging in, now you can. Unlike other applications from the Office Suite that way in the past you could choose not to install independent components (such as Publisher), Teams is the one that has a separate installer that allows you to do so.

    • SvenJ

      In reply to jbinaz: On Business O365 they did in essence force Teams. It replaced Skype for Business. By replaced, I opened Skype and was greeted with "Your company has switched to Teams, install it now?". My company is me. I was not asked, though I was 'notified' the switch was happening in the numerous e-mails I get from MS. I imagine a large customer, who cared, could have stopped or postponed that. So yes, if you are a normal business, and used Skype for Business for messaging, voice and VTC, you are using TEAMS for that now, or you aren't doing it anymore. All the other stuff TEAMS provides just comes along.


    • mclark2112

      In reply to jbinaz:

      I think they did force install Teams in an update over the winter at some point. Can't remember exactly when. But it caught us off guard and, as a Skype for Business Phone system client, we had to run scripts and add a group policy to remove or not allow Teams.


      I much prefer Teams to SfB, but we only installed this phone system 18 months ago, and we need to get our money's worth out of it. Running Team and SfB at the same time can really confuse the users, and at worst bork the Skype integration.

      • skolvikings

        In reply to mclark2112:

        It was an Office 365 ProPlus (now named Microsoft 365 Apps for enterprise) update that by default installed Teams on all existing O365 ProPlus installs. Prior to that, if you wanted Teams installed as a part of Office 365 ProPlus, you had to specify that, it wasn't the default. The update changed that.

    • Paul Thurrott

      Yeah, I was confused by that as well.
  25. Vladimir Carli

    I have no idea if it’s legal or not but in my opinion the situation does harm competition and innovation. Microsoft gives teams included in a much larger offering and it’s very difficult to compete if most of your users need an O365 subscription anyway and they would have to pay additional for something that is already included. Many businesses would stay with teams due to the fact that is included in office, even if slack was better. I am not saying that slack is better, I’ve never used it. I am just discussing a principle. It seems to me that is extremely difficult for anyone to compete with teams and this does harm the competition.


    Having said this, maybe Microsoft behavior is perfectly legal but that means that the law needs adjustment. Otherwise we will end up to a point where 5 companies own everything and there will be no more choice.

    • lvthunder

      In reply to Vladimir:

      So at what point do you say to a company you can't add any more value to your product?


      Slack could team up with other companies to compete with Microsoft 365 if they wanted to. Slack, OpenOffice, and Dropbox would be close enough for a lot of people.

      • Vladimir Carli

        In reply to lvthunder:


        i don’t have an answer and don’t pretend to know what’s right and wrong. However, if I put myself in the shoes of a small startup that has an amazing idea for a conference call system, I don’t think it’s easy to go against a behemoth like apple or Microsoft. In the long run having very few huge corporations will harm innovation and it might be a big problem.

      • mejason83

        In reply to lvthunder:

        100% agree, they aren't forcing customers to use it. They include and if customers see value in migrating then so be it. MS charges the same if u use it or not. Maybe if they gave discounted to drop Slack it would be more of an issue.

  26. jwpear

    We switched from Slack to Teams several years ago because it was included in our Office subscription. At the time, we deemed it good enough for chat style communication and using it saved our small company some money. If it hadn't have been good enough, we would not have switched, regardless of the cost savings.


    Today, the value seems even greater with the rapid pace that Microsoft has introduced new features and integration into Teams.


    I admit I have not looked at Slack in a while, but I do wonder if they've kept pace with Teams. Is that really why they're not growing?


  27. hellcatm

    I hate when companies do that. They sue because a company is doing something better than them instead of just trying to make a better product. When Teams was a product that people didn't want because it wasn't as easy to use or feature rich Slack was fine, but now that they've passed them and they're not doing well during Covid, they decide to go after them. They know they'd get laughed at in the US so they try in the EU where they have a slightly better chance.



    • a_lurker

      In reply to HellcatM:

      Often MS has used its control of Windows to abuse competitors in various ways in the past, there is a long list. MS has a history that makes the suit believable at first glance. But the 500 lb gorilla in the room is Zoom and their market share. Zoom and others might have enough of a market share to make the abuse of its monopoly on desktop OSes moot.


      Personally, I wish MS would stop pushing half-backed at best 'solutions' like Teams (it has many badly implemented features) and concentrate on making W10 a decent OS.

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