Microsoft is likely to face an EU competition investigation as regulators intensify their scrutiny into its practices in a case triggered by Salesforce.com's workspace messaging app Slack, people familiar with the matter have said.
Last year, Slack complained to the European Commission, saying that Microsoft has unfairly integrated its workplace chat and video app Teams into its Office product. Microsoft introduced Teams in 2017, seeking a slice of the fast-growing and lucrative workplace collaboration market.
Slack urged the EU competition enforcer to order the US software giant to separate Teams from the Office Suit and sell it separately at fair commercial prices.
The Commission last month sent out another batch of questionnaires in a follow-up to those sent out in October last year, a sign that the EU competition enforcer is preparing the ground for opening a formal investigation, the people said.
"The Commission is looking at (Microsoft's) interoperability and bundling but more detailed this time. They are looking for information that allows them to define remedies," one of the people said.
"They are preparing the ground for an investigation," a second person said.
The Commission and Microsoft, which has been fined €2.2 billion for cases involving so-called tying and other practices in the previous decade, declined to comment.
US regulators likely to file lawsuit to block Activision Blizzard deal
It comes after Politico reported that the US Federal Trade Commission (FTC) is likely to file a competition lawsuit to block Microsoft's $69 billion takeover bid for video game publisher Activision Blizzard.
A lawsuit challenging the deal is not guaranteed, and the FTC's four commissioners have yet to vote out a complaint or meet with lawyers for the companies, the report said, citing people familiar with the matter.
It added that the FTC staff reviewing the deal are skeptical of the companies' arguments.
"We are committed to continuing to work cooperatively with regulators around the globe to allow the transaction to proceed, but won't hesitate to fight to defend the transaction if required," an Activision Blizzard spokesperson said.
Any suggestion that the transaction could lead to anticompetitive effects is "completely absurd," the spokesperson added.
Microsoft, maker of the Xbox game console, announced in January the deal to buy Activision, the maker of "Call of Duty" and "Candy Crush" games, in the biggest gaming industry deal in history as global technology giants staked their claims to a virtual future.
Microsoft is betting on the acquisition to help it compete better with videogame leaders Tencent and Sony.
The deal is also facing scrutiny outside the US and the EU opened a full-scale investigation earlier this month.
The EU competition enforcer said it would decide by March 23, 2023, whether to clear or block the deal.
Britain's competition watchdog in September also said it would launch a full-scale probe.
The acquisition could damage the industry if Microsoft refused to give rivals access to Activision's best-selling games, the UK regulator has said.
The deal has drawn criticism from Sony, maker of the Playstation console, citing Microsoft's control of games like "Call of Duty."
"Sony, as the industry leader, says it is worried about 'Call of Duty,' but we've said we are committed to making the same game available on the same day on both Xbox and PlayStation," Microsoft President and Vice Chair Brad Smith has said.
A spokesperson for Microsoft said: "We are prepared to address the concerns of regulators, including the FTC, and Sony to ensure the deal closes with confidence".
"We'll still trail Sony and Tencent in the market after the deal closes, and together Activision and Xbox will benefit gamers and developers and make the industry more competitive", the spokesperson added.
