Microsoft to separate Teams from Office to avert EU antitrust fine

Satya Nadella - CEO, Microsoft

Microsoft will unbundle its chat and video app, Teams from its Office product and make it easier for rival products to work with its software, the U.S. company said on Thursday in a move aimed at staving off a possible EU antitrust fine.

The proposed changes came a month after the European Commission launched an investigation into Microsoft’s tying of Office and Teams following a complaint by Salesforce-owned workspace messaging app Slack in 2020.

Microsoft’s preliminary concessions failed to address concerns. The EU competition enforcer on Thursday said it took note of the company’s announcement and declined further comment.

Teams was added to Office 365 in 2017 for free. It eventually replaced Skype for Business and gained in popularity during the pandemic due in part to its video conferencing.

“Today we are announcing proactive changes that we hope will start to address these concerns in a meaningful way, even while the European Commission’s investigation continues and we cooperate with it,” Nanna-Louise Linde (NYSE:LIN), Microsoft’s vice president for European government affairs said in a blogpost.

She said the changes seek to address two EU concerns, “that customers should be able to choose a business suite without Teams at a price less than those with Teams included, and that we should do more to make interoperability easier between rival communication and collaboration solutions and Microsoft 365 and Office 365 suites”.

The changes, effective from Oct. 1, will apply in Europe and Switzerland.

Office without Teams will be sold at a lower price, 2 euros less per month or 24 euros ($26.17) per year to Microsoft’s core enterprise customers, which represent most of the company’s commercial business in Europe.

New enterprise customers can buy Teams standalone and separately for 5 euros per month or 60 euros per year, while existing enterprise customers who already have a suite with Teams can choose to keep it or move to a without-Teams suite.

New support resources will be introduced to help customers and independent software vendors who want to remove data from Teams and used it in another product.

Microsoft will also develop a new method for hosting the Office web applications within competing apps and services similar to what it does with Teams.

The stakes are high for the U.S. tech giant which racked up 2.2 billion euros ($2.40 billion) in EU antitrust fines in the previous decade for tying or bundling two or more products together but which has since then sought a more conciliatory approach with regulators.


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