Microsoft To Unbundle Teams To Satisfy EU Antitrust Concerns

Microsoft is to make a significant change to its Office suite of products in Europe, in an effort to appease antitrust concerns.

On Thursday Microsoft in a blog post confirmed it would unbundle its chat and video app Teams from its Office product and make it easier for competing products to work with its software, in order to stave off a possible EU antitrust fine.

It comes after the European Commission in July this year opened an investigation into Microsoft’s bundling of Office and Teams, following a complaint by Salesforce-owned workspace messaging app Slack back in 2020.

Teams complaint

Microsoft had actually added its Teams app to its Office 365 productivity suite in 2017 for free, with the aim to eventually replace Skype for Business.

Teams rival Slack Technologies said at the time that the 2017 move took unfair advantage of Microsoft’s dominance in productivity software to crush competition.

During the Covid-19 pandemic and worldwide lockdowns, Teams gained increasing popularity due in part to its video conferencing capabilities.

In July 2020 Slack (now owned by Salesforce) submitted an official complaint against Microsoft, alleging that Redmond illegally tied Teams to its dominant productivity suite.

The European competition regulator last month began a formal investigation in the issue, after Microsoft’s offer of remedies had failed to address the regulator’s concerns.

Reuters noted that Microsoft’s moves announced on Thursday were similar to preliminary concessions that had failed to address regulatory concerns. The EU competition enforcer reportedly said it took note of the company’s announcement and declined further comment.

The Commission could hit the company with formal charges in the autumn unless it beefs up its offer, people familiar with the matter told Reuters last month.

Teams unbundling

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,” wrote Nanna-Louise Linde, Microsoft’s VP for European government affairs said in the blogpost.

“These changes will impact our Microsoft 365 and Office 365 suites for business customers in the European Economic Area and Switzerland,” wrote Linde.

“They are designed to address two concerns that are central to the Commission’s investigation: (1) that customers should be able to choose a business suite without Teams at a price less than those with Teams included; and (2) that we should do more to make interoperability easier between rival communication and collaboration solutions and Microsoft 365 and Office 365 suites.”

The changes will be effective from 1 October.

“We believe these changes balance the interests of our competitors with those of European business customers, providing them with access to the best possible solutions at competitive prices,” wrote Linde.

“We also recognise that we are still in the early stages of the European Commission’s formal investigation. We will continue to engage with the Commission, listen to concerns in the marketplace, and remain open to exploring pragmatic solutions that benefit both customers and developers in Europe.”

It remains to be seen whether Microsoft’s action will appease European regulators.

Microsoft has been keen to work with regulators around the world, and has been fined heavily before in the EU.

The EU fined the Redmond, Washington-based software giant some 2.2 billion euros (£1.9bn) over the past ten years for breaching competition rules, including by bundling various products together, such as integrating its own browsers or media players into Windows.