Microsoft Corp's (NASDAQ: MSFT) attempt to address EU concerns about its Teams video-conferencing app failed, with the European Union's antitrust enforcers now preparing a formal complaint against the tech giant.
Microsoft's proposal to separate Teams from its broader business software package and offer it to customers independently with an annual discount did not alleviate regulators' worries, Bloomberg reports.
The European Commission is reportedly drafting a statement of objections, which Microsoft could likely receive in the coming months. This development follows the EU's investigation into how Microsoft integrates Teams with its Office 365 and Microsoft 365 packages, prompted by a complaint from Salesforce Inc's (NYSE: CRM) Slack platform.
Microsoft had initially agreed to stop automatically installing Teams on customers' devices.
Despite Microsoft's efforts to address concerns raised by the European Commission, the company finds itself under continued scrutiny. The EU's investigation into bundling Teams with Microsoft's other software offerings has led to a potential formal complaint.
Microsoft's proposal to sell Teams separately with an annual discount has not appeased regulators, and the situation remains unresolved.
The European Union's antitrust enforcers are advancing their investigation, indicating that Microsoft may face further challenges in the European market.
Europe had penalized Microsoft by €2.2 billion between 2004 - 2013 due to antitrust complaints.
Political pressure against Microsoft has been mounting, with MEP Stéphanie Yon-Courtin calling on the commission to enforce concessions.
Yon-Courtin highlighted that Teams had amassed about 270 million users while Slack had about 20 million.
Price Action: MSFT shares traded higher by 0.96% at $339.28 premarket on the last check Thursday.