Slack Technologies Inc. (WORK) has filed a complaint against Microsoft (MSFT) with the European Union (EU) alleging anticompetitive behavior.
In a July 22 complaint filed against the tech giant, Slack says that Microsoft abused its market dominance to eradicate competition with its Microsoft Teams software.
Slack claims that Microsoft’s move to bundle its Teams software with its Microsoft Office suite resulted in millions of users being forced to install the app without being able to remove it. Slack runs a similar range of work and organizational software features on a freemium model that is upgradable by paid subscription.
Slack General Counsel David Schellhase said in a statement on July 22, “They created a weak, copycat product and tied it to their dominant Office product, force installing it and blocking its removal.” He added, “Slack is asking the European Commission to take swift action to ensure Microsoft cannot continue to illegally leverage its power from one market to another by bundling or tying products.”
It is not the first time Slack has taken issue with Microsoft. On May 26, Slack CEO Stewart Butterfield told The Verge that “Microsoft is perhaps unhealthily preoccupied with killing us, and Teams is the vehicle to do that.” Also, last year, Slack accused Microsoft in a Twitter post of copying its video advertisements.
A spokesperson from Microsoft commented on the recent complaint by saying on July 22, “We created Teams to combine the ability to collaborate with the ability to connect via video because that’s what people want. With Covid-19, the market has embraced Teams in record numbers while Slack suffered from its absence of video-conferencing.” The spokesperson added, “We look forward to providing additional information to the European Commission and answering any questions they may have.”
On July 17, FBN Securities analyst Shebly Seyrafi assigned a Buy rating on Slack and a price target of $45, which implies 51% upside potential. He noted that Slack’s competitive pressure from Microsoft Teams is “overblown.” The analyst believes there is room for “healthy growth” in paid customers and that Slack “transcends email” in its offerings of better integration with in-house and third-party applications.
Overall, 11 analysts assign Buy ratings, 7 Hold ratings, and 2 Sell ratings, giving WORK a Moderate Buy Street consensus. The average analyst price target stands at $34.65, suggesting 17% upside potential, with shares already up 32% year-to-date. (See Slack’s stock analysis on TipRanks).
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