Microsoft to unbundle Teams from Office, seeks to avert EU antitrust fine

Brussels (Reuters) – Microsoft has announced that it will be separating its chat and video app Teams from its Office product and will also make it easier for rival products to integrate with its software. The move comes as the U.S. company aims to avoid a potential antitrust fine from the European Union (EU).

The decision to make these changes comes after the EU launched an investigation into Microsoft’s bundling of Office and Teams, following a complaint made by Slack, a workspace messaging app owned by Salesforce, in 2020. However, Microsoft’s initial concessions did not address the concerns raised. The EU competition enforcer acknowledged Microsoft’s announcement but refrained from making any further comments.

Teams was introduced to Office 365 in 2017, replacing Skype for Business, and its popularity has grown significantly during the pandemic, particularly due to its video conferencing capabilities.

Nanna-Louise Linde, Microsoft’s vice president for European government affairs, explained in a blog post that the proposed changes aim to address two key concerns raised by the EU. Firstly, customers should have the option to purchase a business suite without Teams at a lower price than suites that include Teams. Secondly, Microsoft needs to enhance interoperability between rival communication and collaboration solutions, as well as its Microsoft 365 and Office 365 suites.

These changes will come into effect on October 1 in Europe and Switzerland. Office without Teams will be offered at a reduced price, with a 2 euros per month (or 24 euros per year) discount for Microsoft’s core enterprise customers, who make up the majority of the company’s commercial business in Europe.

New enterprise customers will have the option of purchasing Teams as a standalone product for 5 euros per month (or 60 euros per year). Existing enterprise customers with a suite that includes Teams can choose to retain it or switch to a suite without Teams.

Additionally, Microsoft will introduce new support resources to assist customers and independent software vendors who wish to transfer data from Teams to another product. The company will also develop a new method for hosting Office web applications within competing apps and services, similar to its approach with Teams.

The stakes are high for Microsoft, as it has previously faced antitrust fines totaling 2.2 billion euros ($2.40 billion) from the EU for bundling two or more products together. However, in recent years, the company has adopted a more cooperative approach with regulators.

(This story has been corrected to say that Office without Teams will be sold at a lower price, not Teams will be sold at a lower price, in paragraph 8)

($1 = 0.9175 euros)

(Reporting by Foo Yun Chee; Editing by Sharon Singleton, Peter Graff; (([email protected]; +32 2 585 2866; Reuters Messaging: [email protected])