Microsoft will offer its Office 365 and Microsoft 365 suites without Teams and at a reduced price.
Microsoft has evaded EU fines by making changes to how it offers Teams with Microsoft 365 and Office 365, putting an end to a years-long saga over the company’s alleged anticompetitive practices.
Initially, reports suggested that the tech giant was to be levied a minimal fee. However, sources told Bloomberg earlier this month that the company’s proposed commitments received a positive feedback from EU officials, who decided not to fine the company.
Under the commitments proposed by Microsoft, the company will offer its Office 365 and Microsoft 365 suites without Teams and at a reduced price.
The company has also promised to allow customers with long-term licenses to switch to suites without Teams, provide interoperability for key functions between communication and collaboration tools that compete with Microsoft products and allow customers to move their data out of Teams to their preferred platform.
Since its launch in 2017, Microsoft has offered Teams by default with its suite offerings, and since at least 2019, according to the Commission, the company has been tying the communication tool to its workplace productivity applications.
In 2020, the company was hit with a complaint by workplace messaging service Slack, which accused the company of bundling Teams in a way that was designed to eliminate rivals.
In 2023, Microsoft was hit with another EU antitrust complaint over its product bundling by German video conferencing service Alfaview.
Shortly after, the EU launched an investigation to determine whether Microsoft’s product-bundling amounted to an abuse of its market power. The preliminary results from the investigation found that by bundling Teams with its enterprise suites, Microsoft breached EU regulations.
The Commission preliminarily found that Microsoft restricted competition on the market for cloud-based communication and collaboration products, granting Teams an undue competitive advantage in terms of distribution.
This, it said, was reinforced by limitations in interoperability between Microsoft’s applications such as Outlook and Word and tools that compete with Teams.
In 2023, Microsoft unbundled Teams from Office, offering both separately to consumers, while earlier this year, it adjusted their pricing.
The EU tested Microsoft’s commitments between May and June this year, and consulted all interested third parties. Following the tests, Microsoft amended its initial proposals and further lowered the prices of Microsoft 365 and Office 365 suites without Teams.
It also promised to advertise its enterprise suite offerings with and without Teams, and publish information on interoperability and data portability. Microsoft has also, on its own, decided to make this change to its offerings worldwide.
The Commission says that the commitments offered by Microsoft will remain in force for seven years, except for the commitments relating to interoperability and data portability which will remain in force for 10 years.
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