Key points
- Microsoft has agreed to unbundling its Teams platform from the Office 365 and Microsoft 365 suites.
- This decision avoids a potential hefty antitrust fine from the European Union.
- Microsoft will offer cheaper versions of its suites that do not include Teams.
- Interoperability between Teams and competitor tools will be improved.
The European Union has formally closed its antitrust investigation into Microsoft, accepting commitments from the tech giant to address concerns about the bundling of its Teams communication platform with its Office software suites. The decision marks a significant victory for Microsoft, averting what could have been a substantial fine for breaching EU competition rules.
The investigation, initiated in July 2023 following a complaint from Slack, focused on allegations that Microsoft’s practice of bundling Teams with its popular productivity applications stifled competition.
To resolve the EU’s concerns, Microsoft has agreed to several key concessions. These include offering discounted versions of its Office 365 and Microsoft 365 suites, excluding Teams. This will allow customers more choice and potentially enable competitors to gain a stronger foothold in the market.
Furthermore, Microsoft will ensure improved interoperability between its products and those of its rivals, making it easier for users to switch between platforms and migrate their data. The company has also committed to clarifying its website advertising, explicitly showcasing offers for suites that include Teams alongside those that do not.
The EU’s decision, announced Friday, formalizes commitments initially proposed by Microsoft in May. These initial proposals were subsequently strengthened following market testing by the European Commission.
Notably, Microsoft agreed to increase the price difference between its suites with and without Teams by 50%, further emphasizing the choice available to consumers. The agreement will bind Microsoft for a period of seven years or more, ensuring a sustained shift in its business practices.
Teresa Ribera, the EU’s executive vice president, hailed the agreement as a step toward fostering fair competition. Microsoft, for its part, expressed its satisfaction with the outcome and pledged to implement the agreed-upon obligations swiftly.
While Slack, the original complainant, has not yet publicly commented, the resolution significantly alters the competitive landscape in the workplace communication software sector. The case underscores the ongoing scrutiny of large tech companies and their business practices within the European Union.
