with Tonya Riley
But a new complaint from Slack could upend that.
The workplace chat company yesterday filed an antitrust complaint with European regulators against the Washington state giant, my colleague Jay Greene reports. Slack is alleging Microsoft illegally tied its Teams messaging service with its Office products, forcing people to install it.
Slack says that abuses the dominant position Microsoft's Office software holds.
“We think that Microsoft is engaged in this behavior because they believe that Slack is an existential threat,” Slack General Counsel David Schellhase said in a conference call with reporters yesterday. “Slack, the product, threatens Microsoft’s hold on business email, the cornerstone of Office, which means it threatens Microsoft’s highly profitable lock on enterprise software.”
Slack indicated that action in the United States is on the table.
The company was intentional about starting the fight in Europe, where regulators have been particularly aggressive in their efforts to crack down on American tech giants. But it indicated it's talking to relevant regulators and policymakers on this side of the Atlantic, too.
“We chose Europe very deliberately,” Schellhase told reporters. “We haven’t taken any similar action now in the U.S. But we’re having conversations with the relevant authorities as well. And we don’t rule out actions in the U.S.”
Stewart Butterfield, Slack's chief exeuctive, explained the company's decision on Twitter:
Microsoft’s practices are pretty much the textbook illustration of what the regulations are intended to prevent. You can never know in these cases, but I’m confident the Commission will pursue the investigation and find Microsoft in violation — so is every expert we can find.— Stewart Butterfield (@stewart) July 22, 2020
Slack is asking European regulators to order Microsoft to break off Teams from Office, and also charge a price in line with market rates for the product.
As Jay notes, Slack's allegations are somewhat different than the complaints against companies like Apple and Google, which focus on consumer harm. Slack's allegations instead focus on the harm to businesses, who buy the workplace tools.
There are parallels between this complaint and Microsoft's antitrust battles 20 years ago.
A federal judge in 2000 ordered a breakup of Microsoft after finding the company violated antitrust law, following accusations it used its monopoly on operating systems to squash browser rival Netscape Communications. Microsoft and the federal government settled in 2002 after an appeals court reversed the breakup order. The company began giving computer makers more freedom to include competitors' software on personal computers.
Shira Ovide of the New York Times notes the similarities between Netscape and Slack's concerns:
Someone find an old @dinabass story and do an antitrust Mad Libs to replace Internet Explorer with Microsoft Teams. https://t.co/SIfqRDVDfK— Shira Ovide (@ShiraOvide) July 22, 2020
U.S. lawmakers and regulators have been looking to that antitrust battle as a guide as they prepare for Monday's hearing. Microsoft President Brad Smith met with lawmakers on the House antitrust subcommittee in recent weeks, according to a report in The Information. The lawmakers primarily focused on Microsoft's perspective as a tech company that previously faced antitrust scrutiny, but Smith also raised concerns that Apple's App Store is anticompetitive.
Microsoft didn't comment on Slack's specific allegations, but the company told Jay it would answer any questions from the European Commission. Microsoft spokesman Frank Shaw told Jay that Teams customers use it because of its integrations with other Microsoft products, like its video conferencing tools.
Tech players are increasingly going public with their beefs against industry giants as antitrust scrutiny snowballs.
Smaller tech companies previously were silent publicly when it came to their competition concerns about larger tech companies. But as regulators have increasingly set their sights on breaking up Big Tech, companies including Spotify, Tinder, Sonos and others have been sounding the alarms.
The complaint comes at a critical moment for the industry. The European Commission recently opened a probe into Apple's App Store following Spotify's complaint, signaling its willingness to listen when it comes to smaller rivals.
The complaint marks a major shift in tone from Slack.
Slack took out a full-page ad in the New York Times welcoming the competition from Teams when it launched four years ago.
“We’re glad you’re going to be helping us define this new product category. We admire many of your achievements and know you’ll be a worthy competitor,” the Slack ad read.
Butterfield has also previously said Teams is not a Slack competitor. But now he argues the company's bundling is preventing people from even ever trying Slack. From Twitter:
So, why file a complaint? As @benthompson put it, for Microsoft, getting customers to switch “was never the goal.” Like Instagram adding Stories to “remove the impetus for new users to even try Snapchat, Teams is … a way to prevent] a Microsoft customer from even trying Slack.”— Stewart Butterfield (@stewart) July 22, 2020
Our top tabs
Apple is defending its App Store policies ahead of the antitrust showdown in Washington.
The company released research showing the fees it collects from developers are standard with the rest of the industry pricing, Sarah E. Needleman at the Wall Street Journal reports.
The independent study found the App Store's 30 percent fee falls in line with its closest competitors, including Google, which operates Android. The fee is below the commissions for ticket resellers StubHub and Ticketmaster, it found.
The impact of App Store policies on developers will take center stage Monday when the House Judiciary antitrust subcommittee grills chief executive Tim Cook and other tech executives.
Developers and lawmakers have long criticized Apple for taking a 30 percent cut of sales from developers on its App Store. It also shapes the way users discover apps and has been accused of giving preference to its own apps, charges the company denies.
Facebook and YouTube may follow Twitter in cracking down on QAnon-related content.
The discussions follow Twitter's ban on 7,000 related accounts and limiting of 150,000 others, Rachel Lerman and Elizabeth Dwoskin report. The conspiracy theory, which accuses “deep state” actors of trying to unseat President Trump among other things, has moved from the fringes of the Internet to the platforms of some Republican politicians.
A person familiar with Facebook’s thinking confirmed a New York Times report that Facebook also plans to limit the reach of QAnon-related posts.
YouTube is working to reduce the spread of QAnon videos, spokesman Farshad Shadloo said. The content falls under its “borderline” designation, which allows videos to remain online but limits how they're recommended.
That policy allows videos to remain online while not being recommended widely.
The move to limit the conspiracy theory's reach highlights platforms' increased willingness to prohibit misinformation. QAnon accounts have played a significant role in spreading misinformation about the coronavirus, behavior Facebook has disavowed.
But the crackdown could spur more allegations of bias against conservatives. QAnon groups are highly active in supporting Trump and the president has retweeted accounts promoting the conspiracy theory.
Republicans want Twitter chief executive Jack Dorsey to testify at the House antitrust hearing.
The call for Dorsey's appearance on Monday marks another clash between Republicans and Democrats over the format of the much-anticipated hearing, Lauren Feiner at CNBC reports.
“We believe there is bipartisan interest to hear from Twitter about its power in the marketplace, its role in moderating content on its platform, and the causes for its recent highly publicized security breaches,” Rep. Jim Jordan (R-Ohio) wrote in a letter to Democratic leadership. The top Republican on the Judiciary Committee also asked committee Chairman Jerrold Nadler (D-N.Y.) to open the hearing to the full committee but says in the letter that Nadler has declined.
But Twitter is much smaller than the other four companies whose executives will testify: Facebook, Google, Amazon and Apple. (Amazon CEO Jeff Bezos owns The Washington Post.) It also wields less power over competitors. Republicans including Jordan have criticized Twitter for silencing conservative voices.
Kara Swisher, who first reported the letter:
It is novel choice from @Jim_Jordan since Twitter is so much smaller than the others appearing: @sundarpichai from @Google, @tim_cook from @apple, @finkd from @Facebook and @JeffBezos from @amazon. Essentially his argument is that they are the mouse that roars 🐁.— Kara Swisher (@karaswisher) July 22, 2020
Swisher also pointed out it's extremely unlikely Dorsey would testify:
In any case, likely Jack will not appear and this will all be remote anyways so less drama, but points for creativity.— Kara Swisher (@karaswisher) July 22, 2020
Rant and rave
Basecamp and Hey founder David Heinemeier Hansson takes a swing at Apple's commissioned study:
Besides, none of these other stores have anywhere near the dominant position that Apple enjoys in the market for premium services. As I just accounted for, we're seeing Apple devices in use with 90% of paying HEY customers 😬 https://t.co/Ne9cxNHTDq— DHH (@dhh) July 22, 2020
Inside the industry
Hackers accessed the private messages of 36 Twitter users, including one elected official in the Netherlands.
No other current or former elected officials had their private messages exposed in last week's hack, Twitter said in an update.
We believe that for up to 36 of the 130 targeted accounts, the attackers accessed the DM inbox, including 1 elected official in the Netherlands. To date, we have no indication that any other former or current elected official had their DMs accessed.— Twitter Support (@TwitterSupport) July 22, 2020
Hackers targeted the accounts of Joe Biden, Elon Musk, Jeff Bezos and 127 other users last Thursday to spread fake bitcoin deals. Hackers were able to download data from eight of the accounts, none of which were verified, Twitter said.
The company pinned the attack on hackers who conned employees into giving up credentials that provided access to Twitter's internal systems. The FBI is investigating the attack, which it believes was financially and not politically motivated.
More industry news:
- RightsCon will take place online on July 27-31.
- The Senate Commerce Internet Subcommittee will hold a hearing to examine the state of United States spectrum policy today at 10 a.m.
- The House Judiciary will hold a hearing on online platforms and market power with testimony from the CEOs of Amazon, Apple, Facebook and Google Monday at 12 p.m.
- The Senate Commerce Committee will hold a hearing on The PACT Act and Section 230 on Tuesday at 10 a.m.
Before you log off
Stephen Colbert discusses Mark Zuckerberg's outdoor look: