Published: Sep 15, 2023
Key takeaways:
- The European Commission is reportedly initiating a formal antitrust investigation into Microsoft’s bundling of Teams with its Office 365 suite, triggered by a complaint filed by Slack in 2020.
- Microsoft’s decision to address antitrust concerns by unbundling Teams from Office 365 in Europe have not appeased EU regulators.
- The EC is preparing a statement of objections to send to Microsoft in the next few months.
The European Commission is gearing up for a formal antitrust investigation into Microsoft’s contentious bundling of Teams with its Office 365 suite. According to a report from Bloomberg, the EC is preparing a statement of objections to send to Microsoft in the coming months.
In July 2020, Slack filed an anti-competitive complaint against Microsoft with the European Commission. The company alleged that Microsoft is using its dominance to crush competitors by bundling Teams with its Office 365 subscriptions.
Last month, Microsoft announced that it would start unbundling Teams from its Microsoft 365/Office 365 commercial suites in EU markets on October 1, 2023. This change will let enterprise customers in Europe and Switzerland purchase a Microsoft 365/Office 365 subscription at a lower monthly price without Microsoft Teams. They will also be able to buy a standalone Teams subscription for €5 per month or €60 per year.
According to Bloomberg, Microsoft’s proposed plan failed to satisfy regulators and the European Commission. The executive and regulatory branch of the EU is getting ready to send a statement of objections to Microsoft.
“Microsoft’s recent proposal to split its Teams from a broader business software package and sell it to customers separately with an annual discount wasn’t enough to satisfy regulators’ concerns, according to people familiar with the matter, who spoke on condition of anonymity. The European Commission is preparing a statement of objections to send to the company, which could come in the next few months, the people said,” Bloomberg wrote.
Currently, it’s not clear why Microsoft’s decision to unbundle the Teams collaboration software with the Office productivity suite couldn’t address the concerns of EU regulators. Meanwhile, the European Commission declined to comment on Bloomberg’s report. It remains to be seen if Microsoft makes negotiations with the EC to avoid the formal antitrust investigation.
It’s important to note that Microsoft is facing multiple EU regulatory investigations. Earlier this month, the European Union said that Microsoft and 6 other big tech companies are gatekeepers. The EU’s Digital Market Act should ensure that the gatekeepers conform to a new set of rules on how they can operate designated “core platform services.”