Microsoft (NASDAQ:MSFT) recently found itself under fire from EU antitrust regulators for integrating its chat and video platform, Teams, with its Office software suite. The European Union raised concerns about this bundling practice, alleging that it violated antitrust regulations. In response to previous feedback, Microsoft had attempted to separate Teams from Office on a global scale in an effort to address these concerns.
Despite Microsoft’s efforts to comply with EU regulations, the antitrust regulator deemed the changes as inadequate in rectifying the situation. The EU insisted that further modifications to Microsoft’s practices are essential to promote fair competition. Microsoft, in turn, assured that it would take the necessary steps to address the additional concerns raised by the commission.
EU’s Critique of MSFT’s Teams Integration
The European Union Commission scrutinized Microsoft’s actions dating back to 2019, highlighting the bundling of Teams with its Software-as-a-Service (SaaS) applications, such as Office. The Commission observed that this bundling strategy could have provided Microsoft with an unfair advantage in distribution, as customers were not given the option to choose whether they wanted access to Teams when subscribing to SaaS productivity apps.
This lack of choice limited customer autonomy and hindered interoperability with rival products, potentially impeding innovation and disadvantaging customers within the European Economic Area (EEA).
Assessing Microsoft’s Stock Position
Market analysts continue to express optimism regarding MSFT stock, maintaining a Strong Buy consensus rating based on 34 Buy recommendations and one Hold. Over the past year, MSFT has recorded a significant increase of over 35%, indicating a positive trend in its performance. The average price target for MSFT stands at $500.71, suggesting an upside potential of 11.8% from its current valuation.
