Microsoft Escapes EU Antitrust Penalties with Teams Unbundling Deal
EU deal forces Microsoft to unbundle Teams from Office, cutting costs and boosting competition.
Key Takeaways:
- Microsoft avoids EU antitrust penalties by making major concessions.
- Office and Microsoft 365 subscriptions to be offered without Teams.
- Changes aim to increase competition and lower costs for businesses.
Microsoft has avoided a potentially costly antitrust probe by the European Commission over its bundling of Teams with Microsoft 365 and Office 365 subscriptions. To address regulators’ concerns, the company will now offer stripped-down versions of its Office suite without Teams at a reduced price.
In July 2020, Slack filed an official antitrust complaint against Microsoft in the EU. The company alleged that Microsoft is abusing its market dominance to extinguish competition by bundling its Teams app with the Office 365 suite at no additional cost. In 2023, the EC began a formal investigation into whether a company violated antitrust laws and indicated that a financial penalty could be imposed.
Microsoft’s Concessions to EU Regulators
In May, Microsoft addressed antitrust concerns by proposing changes to how it sells and integrates Teams with Microsoft 365. The company agreed to release versions of its Office suites without Teams at a lower price. It also pledged to improve interoperability with rival collaboration tools and make it easier for customers to migrate their data out of Teams to competing platforms.
The EC has now accepted these concessions, and Microsoft must comply with the agreement for at least seven years. The EU regulator said that these changes will make the market fairer and give other companies a better chance to compete.
“The commitments address the Commission’s concerns related to the tying of Microsoft Teams to the company’s popular productivity applications Word, Excel, PowerPoint, Outlook, included in its Office 365 and Microsoft 365 suites for business customers,” the European Commission explained.
Impact on Pricing and Competition
EU regulators will oversee the implementation of the settlement for a period of seven years. However, certain commitments related to interoperability and data portability will remain in force for ten years.
“We applaud the Commission’s efforts to hold Microsoft accountable,” said Sabastian Niles, President & Chief Legal Officer at Salesforce. “We look forward to the Commission’s rigorous monitoring and enforcement of the commitments to ensure Microsoft fully complies with its obligations.
Microsoft’s new agreement is set to bring significant savings for businesses using Office or Microsoft 365 subscriptions. The price difference between plans with Teams and those without will be cut in half. For now, the lower prices apply only in the EU, though Microsoft may extend them worldwide.
Rabia has a master's degree in Software Engineering and she has years of experience writing professionally about Microsoft products and other technologies. Rabia has also written for OnMSFT.com as well as Windows Report. She is always up to date on t...
