Slack Technologies Files Anticompetition Complaint Against Microsoft

Slack Technologies (WORK) has filed a complaint with the European Commission accusing Microsoft (MSFT) of engaging in anticompetitive practices.

Slack alleged that Microsoft illegally tied its Teams work communication product to its Office productivity suite. As a result, Slack claimed that measure forced millions of people to install the app without the ability to delete it – thereby hiding the true cost to enterprise customers.

Slack operates a service that competes directly with Microsoft Teams.

"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, vice president of communications and policy at Slack. "Slack threatens Microsoft’s hold on business email, the cornerstone of Office, which means Slack threatens Microsoft’s lock on enterprise software."

Prince added: "But 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."

David Schellhase, general counsel at Slack, said the company just wants fair competition and a level playing field.

“Healthy competition drives innovation and creates the best products and the most choice for customers,” he said. “Competition and antitrust laws are designed to ensure that dominant companies are not allowed to foreclose competition illegally. We’re asking the EU to be a neutral referee, examine the facts, and enforce the law.”

Schellhase further stated that Microsoft is reverting to its past behavior.

“[Microsoft] 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 behavior during the ‘browser wars’”, he added. “Slack is asking the European Commission to take swift action to ensure Microsoft cannot continue to illegally leverage its power from one market to another by bundling or tying products."

The European Commission will review Slack’s complaint and determine if it should commence a formal investigation into Microsoft’s alleged anti-competitive practices.

In May of this year, Slack CEO Stewart Butterfield told The Verge: “Microsoft is perhaps unhealthily preoccupied with killing us, and Teams is the vehicle to do that.”

However, Butterfield once told CNBC: “[Microsoft] Teams is not a competitor to Slack.”

As of October 2019, Slack said it had more than 12 million daily active users.