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Slack accuses Microsoft of anticompetitive practices in EU complaint – CNBC

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Stewart Butterfield, co-founder and CEO of Slack, waits to do a television interview after ringing the opening bell the New York Stock Exchange in New York on June 20, 2019.

Drew Angerer | Getty Images

Slack filed a complaint against Microsoft with the European Commission alleging anticompetitive behavior, the company said on Wednesday. 

Slack alleges in the complaint that Microsoft abused its market dominance to eliminate competition for its Teams work communication product by tying it to its popular Office productivity suite. Slack claims that move meant millions were forced to install the app without the ability to remove it. Slack runs a service that competes directly with Microsoft Teams.

Slack’s stock was down about 1% Wednesday morning and Microsoft’s was slightly positive. A Microsoft representative was not immediately available to comment. A spokesperson for the EU Competition Commission confirmed it received the complaint and said in a statement, “We will assess it under our standard procedures.”

The complaint stems from previous frustrations at Slack. CEO Stewart Butterfield told The Verge in an interview in May, “Microsoft is perhaps unhealthily preoccupied with killing us, and Teams is the vehicle to do that.” Still, Butterfield told CNBC earlier that month that “Teams is not a competitor to Slack,” even though a filing with the Securities and Exchange Commission names Microsoft as Slack’s “primary competitor.”

Microsoft has largely avoided scrutiny from antitrust authorities in recent years after the landmark case against the company brought by states and the Justice Department around the turn of the century. In that case, U.S. officials accused Microsoft of maintaining a monopoly by bundling its browser, Internet Explorer, to its Windows operating system. Prosecutors argued that this limited the marketplace for competing browsers for Windows.

Slack’s complaint echoes aspects of that earlier Microsoft case by claiming the company bundles its Teams product to its Office suite.

“Microsoft is reverting to past behavior,” Slack’s General Counsel David Schellhase said in a statement in the press release announcing the complaint. “They created a weak, copycat product and tied it to their dominant Office product, force installing it and blocking its removal, a carbon copy of their illegal behavior during the ‘browser wars.’ 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.”

Slack’s move to file its complaint in the E.U. is telling. Though both companies are based in the U.S., Slack is undoubtedly aware of the E.U.’s recent history of aggressive antitrust enforcement under Competition Commissioner Margrethe Vestager. Vestager has brought record fines against Google and has announced or is reported to be investigating several other major U.S. tech companies including Amazon, Apple and FacebookSpotify used a similar strategy in March of 2019 when it filed an antitrust complaint against Apple in the E.U.

Still, the complaint is likely to raise questions among U.S. antitrust authorities, whose investigations of the tech industry have been among the most closely watched. Microsoft hasn’t completely escaped scrutiny by U.S. officials, though it has certainly seen less attention than many of its peers. The Federal Trade Commission’s Office of Policy Planning included Microsoft in its review of past acquisitions in the tech industry, a project that is not part of its enforcement arm but could dig up potential enforcement issues.

-CNBC’s Steven Kopack contributed to this report.

WATCH: How US antitrust law works, and what it means for Big Tech

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Amazon, Apple not to charge extra for lossless music

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Amazon.com Inc and Apple Inc will let users stream high-quality lossless audio at no extra charge, as they explore new ways to keep subscribers tuned in to their services amid intense competition.

Amazon Music, which so far charged a premium for lossless audio, became the first major music service on Monday to upgrade its subscribers to the format.

Lossless is a higher quality audio format that preserves every detail of the original audio file without compressing the quality while streaming.

American rapper Jay-Z’s Tidal was among the first to roll out the technology, charging $19.99 per month for lossless music.

The e-commerce giant’s Amazon Music Unlimited with lossless music will cost less than half that at the industry standard price of $9.99 per month.

Separately, Apple said subscribers would be able to listen to its entire music catalog of more than 75 million songs by next month in the lossless format at no additional cost.

 

(Reporting by Eva Mathews and Subrat Patnaik in Bengaluru; Editing by Anil D’Silva)

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Cyberattack exposes lack of required defenses on U.S. pipelines

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The shutdown of the biggest U.S. fuel pipeline by a ransomware attack highlights a systemic vulnerability: Pipeline operators have no requirement to implement cyber defenses.

The U.S. government has had robust, compulsory cybersecurity protocols for most of the power grid for about 10 years to prevent debilitating hacks by criminals or state actors.

But the country’s 2.7 million miles (4.3 million km) of oil, natural gas and hazardous liquid pipelines have only voluntary measures, which leaves security up to the individual operators, experts said.

“Simply encouraging pipelines to voluntarily adopt best practices is an inadequate response to the ever-increasing number and sophistication of malevolent cyber actors,” Richard Glick, the chairman of the Federal Energy Regulatory Commission (FERC), said.

Protections could include requirements for encryption, multifactor authentication, backup systems, personnel training and segmenting networks so access to the most sensitive elements can be restricted.

FERC’s authority to impose cyber standards on the electric grid came from a 2005 law but it does not extend to pipelines.

Colonial Pipeline, the largest U.S. oil products pipeline and source of nearly half the supply on the East Coast, has been shut since Friday after a ransomware attack the FBI attributed to DarkSide, a group cyber experts believe is based in Russia or Eastern Europe.

The outage has led to higher gasoline prices in the U.S. South and worries about wider shortages and potential price gouging ahead of the Memorial Day holiday.

Colonial did not immediately respond to a query about whether cybersecurity standards should be mandatory.

The American Petroleum Institute lobbying group said it was talking with the Transportation Security Administration (TSA), the Energy Department and others to understand the threat and mitigate risk.

THIN STAFFING

Cyber oversight of pipelines falls to the TSA, an office of the Department of Homeland Security (DHS), which has provided voluntary security guidelines to pipeline companies.

The General Accountability Office, the congressional watchdog, said in a 2019 report that the TSA only had six full-time employees in its pipeline security branch through 2018, which limited the office’s reviews of cybersecurity practices.

The TSA said it has since expanded staff to 34 positions on pipeline and cybersecurity. It did not immediately respond to a request for comment on whether it supports mandatory protections.

When asked by reporters whether the Biden administration would put in place rules, DHS Secretary Alejandro Mayorkas said it was discussing administrative and legislative options to “raise the cyber hygiene across the country.”

President Joe Biden is hoping Congress will pass a $2.3 billion infrastructure package, and pipeline requirements could be put into that legislation. But experts said there was no quick fix.

“The hard part is who do you tell what to do and what do you tell them to do,” Christi Tezak, an analyst at ClearView Energy Partners, said.

U.S. Representatives Fred Upton, a Republican, and Bobby Rush, a Democrat, said on Wednesday they have reintroduced legislation requiring the Department of Energy to ensure the security of natural gas and hazardous liquid pipelines. Such legislation could get folded into a wider bill.

The power grid is regulated by FERC, and mostly organized into nonprofit regional organizations. That made it relatively easy for legislators to put forward the 2005 law that allows FERC to approve mandatory cyber measures.

A range of public and private companies own pipelines. They mostly operate independently and lack a robust federal regulator.

Their oversight falls under different laws depending on what they carry. Products include crude oil, fuels, water, hazardous liquids and – potentially – carbon dioxide for burial underground to control climate change. This diversity could make it harder for legislators to impose a unified requirement.

Tristan Abbey, a former aide to Republican Senator Lisa Murkowski who worked at the White House national security council under former President Donald Trump, said Congress is both the best and worst way to tackle the problem.

“Legislation may be necessary when jurisdiction is ambiguous and agencies lack resources,” said Abbey, now president of Comarus Analytics LLC.

But a bill should not be seen as a magic wand, he said.

“Standards may be part of the answer, but federal regulations need to mesh with state requirements without stifling innovation.”

 

(Reporting by Timothy Gardner; Editing by Cynthia Osterman and Marguerita Choy)

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U.S. senator asks firms about sales of hard disk drives to Huawei

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A senior Republican U.S. senator on Tuesday asked the chief executives of Toshiba America Electronic Components, Seagate Technology, and Western Digital Corp if the companies are improperly supplying Huawei with foreign-produced hard disk drives.

Senator Roger Wicker, the ranking member of the Commerce Committee, said a 2020 U.S. Commerce Department regulation sought to “tighten Huawei’s ability to procure items that are the direct product of specified U.S. technology or software, such as hard disk drives.”

He said he was engaged “in a fact-finding process… about whether leading global suppliers of hard disk drives are complying” with the regulation.

(Reporting by David Shepardson, Editing by Rosalba O’Brien)

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