Slack faces increased competitive pressure from Microsoft Teams despite revenue growth - Business Insider

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Slack's future is predicated on its ability to convince regulators that Microsoft is engaging in anticompetitive practices

of enterprises that already purchase Office 365, Microsoft has effectively rendered Slack redundant. This makes Slack a conspicuous target for IT cost-cutting.

Slack's future is predicated on its ability to convince regulators that Microsoft is engaging in anticompetitive practices. In July 2020, Slack a complaint against Microsoft with the European Commission, alleging that Microsoft's practice of bundling Teams with Office products constituted anticompetitive behavior.

As Slack awaits a ruling, it warned in this week's earnings report that matters could get even worse, as it "could be subject to retaliatory or other adverse measures by Microsoft, its employees, or agents in response to the complaint that we filed with the European Commission." In particular, Slack suggested that Microsoft could limit the interoperability between Slack and Microsoft products in retaliation, which would diminish the functionality of Slack relative to Teams. Finally, even if Slack wins its case in EU courts, 62% of the company's fiscal Q2 2021 revenues came from the US, where it would need to win a separate legal case to force Microsoft to change its pricing practices.

 

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