Marc Benioff Criticizes Microsoft After $663M Slack Antitrust Fine

Introduction

The tech industry is no stranger to antitrust battles, and the latest clash between Salesforce CEO Marc Benioff and Microsoft has reignited discussions about competition, monopolistic practices, and the future of workplace collaboration tools. The controversy stems from a massive $663 million antitrust fine imposed on Microsoft in the European Union (EU) following a complaint by Slack, which is owned by Salesforce.

1. The Background of the Slack-Microsoft Antitrust Dispute

Slack Rise and Microsoft Entry into the Market

Slack, founded in 2013, revolutionized workplace communication by introducing a seamless, chat-based collaboration platform. Its intuitive interface, integrations with other productivity tools, and strong developer ecosystem made it a favorite among startups and enterprises alike. By 2020, Slack had over 12 million daily active users and was widely seen as the leader in team messaging.

However, Microsoft saw the opportunity to dominate this space with their own product: Microsoft Teams. Launched in 2017, Teams was bundled with Microsoft Office 365 suite, giving it an instant advantage due to Microsoft entrenched position in enterprise software.

Slack Antitrust Complaint in the EU

In July 2020, Slack filed an antitrust complaint with the European Commission (EC), accusing Microsoft of anti-competitive practices. The core allegations included:

1. Bundling Teams with Office 365:

Slack argued that Microsoft was forcing businesses to use Teams by making it a default part of its widely used productivity suite.

2. Predatory Pricing:

Since Teams was included “for free” with Office 365, Slack claimed this undercut competitors who had to charge separately for their services.

3. Restricting Interoperability:

Slack accused Microsoft of making it difficult for third-party apps (like Slack) to integrate smoothly with Microsoft products.

The EU’s $663 Million Fine Against Microsoft

After a lengthy investigation, the European Commission ruled in favor of Slack, imposing a $663 million fine on Microsoft for antitrust violations. The EU found that Microsoft had abused its dominant market position to stifle competition, particularly by leveraging Office 365’s widespread adoption to push Teams unfairly.

This ruling was a major win for Salesforce (which acquired Slack in 2021 for $27.7 billion) and set a precedent for how Big Tech companies could be regulated in the future.

2. Marc Benioff Criticism of Microsoft’s Business Practices

Following the EU’s decision, Salesforce CEO Marc Benioff publicly criticized Microsoft, framing the fine as a long-overdue reckoning for anti-competitive behavior.

Key Points from Benioff Statements

1. Microsoft’s “Embrace, Extend, Extinguish” Strategy

• Marc Benioff accused Microsoft of using a classic monopolistic playbook:
  • Embrace: Enter a market (like workplace chat).
  • Extend: Product Group with Prevailing Software (Office 365).
  • Extinguish: Crush competitors by making it impossible to compete fairly.
• He cited historical examples, such as Microsoft’s battles with Netscape in the 1990s.

2. Harm to Innovation

• Marc Benioff argued that Microsoft tactics discourage startups from entering markets dominated by tech giants.
• “When a company can simply bundle a competing product with its monopoly, it kills the incentive for true innovation,” he said.

3. Call for Stronger Regulation

• He praised the EU’s decision and called for similar scrutiny in the U.S., where antitrust enforcement has been less aggressive.

Microsoft’s Response to Marc Benioff

Microsoft CEO Satya Nadella and other executives pushed back, arguing:

• Teams succeeded because of its superior integration with Office tools, not just bundling.
• Slack had opportunities to compete but failed to innovate as quickly.
• The EU ruling could set a dangerous precedent where companies are penalized for improving their own ecosystems.

3. Microsoft’s Defense and Counterarguments

While the EU’s decision was a blow to Microsoft, the company maintains that its practices were fair. Here’s Microsoft side of the story:

A. Bundling Teams Was Pro-Competitive, Not Anti-Competitive

• Microsoft discussed that the Office 365 groups of grouping offers a better customer value.
• Many businesses prefer an all-in-one solution rather than managing multiple standalone apps.

B. Slack Had a Head Start but Lost Due to Execution

• Slack had a five-year lead in the market before Teams launched.
• Critics say Slack failed to expand beyond messaging, while Teams offered video calls, file storage, and deeper Office integration.

C. The Fine Could Hurt, Not Help, Competition

• Some analysts warn that excessive regulation could stifle innovation by discouraging companies from improving their products.
• If Microsoft is forced to unbundle Teams, businesses might face higher costs and more complexity in managing separate tools.

4. The Broader Implications for the Tech Industry

This case is part of a larger global trend of increased antitrust scrutiny on Big Tech. Here’s why it matters beyond just Slack and Microsoft:

A. The EU Leading the Charge Against Tech Monopolies

• The EU has been far more aggressive than the U.S. in regulating tech giants (see Google’s $5B fine and Apple’s App Store battles).
• This case reinforces the EU’s role as the de facto global tech regulator.

B. Will the U.S. Follow Suit?

• The FTC and DOJ have recently taken a tougher stance (e.g., lawsuits against Google, Meta, and Amazon).
• If the U.S. adopts similar antitrust measures, Microsoft and others could face more legal challenges domestically.

C. Impact on Future Mergers and Acquisitions

• Salesforce’s acquisition of Slack was partly a defensive move against Microsoft.
• Other companies may now think twice before bundling products in ways that could trigger antitrust actions.

5. What This Means for the Future of Workplace Collaboration Software

A. Will Slack Gain Ground Against Teams?

• The EU ruling could force Microsoft to unbundle Teams in Europe, giving Slack a better chance.
• However, Teams already has over 300 million users, making it hard to displace.

B. More Regulatory Scrutiny on Bundling

• Companies like Google (Workspace), Zoom, and Cisco (Webex) may also face pressure if they bundle products too aggressively.

C. A Shift Toward Open Ecosystems?

• There’s growing demand for tools that work across platforms (e.g., Slack working smoothly with Outlook).
• If regulators enforce better interoperability, it could level the playing field.

Conclusion: Marc Benioff Criticizes Microsoft After $663M Slack Antitrust Fine

The $663 million EU fine against Microsoft and Marc Benioff vocal criticism highlight a pivotal moment in the battle over fair competition in tech. While Microsoft argues that its integration of Teams provides customer value, regulators (and rivals like Salesforce) see it as monopolistic behavior that stifles innovation.

As antitrust enforcement grows stricter worldwide, tech giants will need to rethink how they bundle and promote products. Meanwhile, smaller competitors like Slack may get a fighting chance, but only if they can keep innovating.