The European Union has reached a significant agreement with Microsoft, requiring the tech giant to unbundle its Teams communication platform from its suite of productivity applications, a move aimed at promoting fair competition in the market. This decision comes after the European Commission launched an investigation into Microsoft’s practices when it was accused of breaching antitrust rules through what was deemed “abusive” bundling of its Teams and Office products.
Teresa Ribera, the executive vice-president for clean, just and competitive transition, announced that Microsoft’s commitments would be binding for an extended period of seven years or more. This is intended to curtail practices that may hinder effective competition against Microsoft Teams.
The commitments outlined by Microsoft include making versions of its Office 365 and Microsoft 365 software suites available at reduced prices without Teams, as well as allowing existing customers with long-term licenses to switch to the versions of the products that do not include Teams. Additionally, Microsoft will enhance interoperability by ensuring that tools competing with Teams can interface with certain Microsoft products. Clients will also have the ability to export data from Teams to alternative platforms.
In response to initial concerns, Microsoft has proposed further commitments. This includes a 50% increase in the price difference between Microsoft 365 and Office 365 packages that include Teams and those that do not. Furthermore, the company has agreed to ensure that advertisements for its suites featuring Teams also clearly present the offerings for those without it.
Nanna-Louise Linde, Microsoft’s vice president of European government affairs, expressed appreciation for the constructive dialogue with the European Commission that led to this agreement, highlighting the company’s commitment to implementing the new obligations effectively and promptly.
The EU began its antitrust investigation in July 2023 following a complaint from Salesforce-owned Slack, which competes directly with Teams. The acquisition of Slack by Salesforce for $27.7 billion in 2021 underscored the rivalries within the workplace communications market, though Slack has not yet commented on the latest developments.
