A common concept in economics, imperfect competition is observed in markets of almost all goods and services. It is no surprise that competition seeps its way into online communication and collaboration platforms as well, contemporarily because of the inevitable wave of digitisation that the world has been undergoing. While there are numerous platforms offering similar services, there are undeniably a few prevalent giants which have risen to power by virtue of their company goodwill, proven adaptability to the need of the hour and strong core interface. One can, therefore, categorise the communication and collaboration platform market to be an Oligopoly, that is, a market wherein a small number of big sellers are in dominance. Namely, Google Meet, Cisco Webex, Zoom Communications, Slack and Microsoft Teams are heavy contenders in this market structure.
Two foremost characteristics of an oligopoly market are interdependence and non-price competition. Decision-making of a seller is largely influenced and modelled by countermoves of rival sellers in the industry. This is because there being only a few players, a new policy or decision by one can indeed be game-changing. Non-price competition relies on marketing, advertising, schemes and incentives by the players to nudge consumers to prefer their product over the competitors’. One thing to be kept in mind here is supplier ethics- despite being in a strictly competitive environment, it is the sellers’ moral obligation to ensure that the parties are engaging in fair competition. As an unsaid rule of every game, contenders are expected to abide by certain laws of morality and ethics.
This brings us to the case in point, the recent complaint filed by Slack against Microsoft for bundling Teams with Office 365. On 22nd July 2020, Slack Technologies made public their decision to take Microsoft to court before the European Commission. Microsoft has been charged with corporate bullying and an abusive usage of their market dominance to douse competition, in breach of the European Union antitrust law. Slack has appealed for Teams to be separated from Office 365 and for a market rate to be charged for the service. It is important to understand that these two platforms offer more than simply video conferencing and chat facilities, they extend to creating channels for specific workspaces, direct access to internal as well as third-party applications, streamlining real-time collaboration and other features which make working from home exceedingly easier for corporates. Slack’s complaint calls out Microsoft for being unethical- stating that tying Teams to their dominant Office suite, forcing its installation, and blocking its removal is an anti-competitive tactic against their direct competition.
(Source- office.com)
While the European Commission is yet to review the complaint and decide for or against a formal investigation against these practices, we cannot deny that a full-blown ‘antitrust war’ has erupted between these two companies. Interestingly, there had been talks of Microsoft’s potential acquisition of Slack for as much as $8 million in 2016, however the campaign failed to garner internal support. The preferred approach was to add features to Microsoft’s Skype, thus cementing the platform as a strong competitor- this led to the birth of Teams in 2017. Undeniably, Teams has had a much steeper growth curve, this can however be attributed to their dominant parent company. Due credit must be bestowed upon Slack which has, in less than a decade, secured daily users in organizations such as The New York Times, Panasonic and Massachusetts Institute of Technology.
(Source- statista.com)
This complaint is however not the first of its kind. In 2000, a federal judge charged Microsoft guilty of violating the antitrust law by using its Windows operating system monopoly to crush competition browsers. The company had imposed restrictions on PC manufacturers from uninstalling the Microsoft Internet Explorer, curbing the use of other programs such as Opera and Netscape Navigation. Their claims of their operating system and browser being one and the same were shunned because a separate installable version of the very same Internet Explorer was available for download on the Mac OS. The judgement passed required Microsoft to break into two in order to explicitly separate their services. A 2001 settlement allowed the company to forgo the required break-up in return for several concessions including more freedom for rival software on their PCs.
A recent survey concluded that while Teams is more likely to be deployed enterprise-wide, Slack is more common on a department-level. One of Slack’s next objectives would therefore be to rise to the enterprise-wide level. Integrating Teams with Office 365 puts Slack in a corner and asserts Microsoft’s dominance as a whole. While the outcome of the aforementioned complaint is yet to be known, one can understand where Slack is coming from when they ask for fair play, restricting the competition between these two companies to their respective collaboration and communication platforms.
Written by: Prerana Bhadra
LITERARY SOURCES https://www.washingtonpost.com/technology/2020/07/22/slack-microsoft-europe/
https://slackhq.com/slack-files-eu-competition-complaint-against-microsoft https://www.valuewalk.com/2017/03/slack-vs-microsoft-teams-collaboration-tools/
IMAGE SOURCES https://www.statista.com/chart/20028/daily-active-users-of-slack-and-microsoft-teams/ https://cdn.arstechnica.net/wp-content/uploads/2020/07/slack-vs-microsoft-charge.jpg
