Microsoft announced on Monday that it will sell its chat and video app Teams separately from its Office product globally, extending a decision made six months ago to unbundle the two products in Europe in an effort to avert a possible EU antitrust fine. The move comes amid an ongoing European Commission investigation into Microsoft's tying of Office and Teams, which began in 2020 following a complaint by Salesforce-owned competing workspace messaging app Slack.

The U.S. tech giant had initially bundled Teams with Office 365 in 2017 for free, leading to the app's replacement of Skype for Business and its surge in popularity during the pandemic, due in part to its video conferencing capabilities. However, rivals argued that packaging the products together gave Microsoft an unfair advantage, prompting the company to start selling the two products separately in the EU and Switzerland on Oct. 1, 2023.

"To ensure clarity for our customers, we are extending the steps we took last year to unbundle Teams from M365 and O365 in the European Economic Area and Switzerland to customers globally," a Microsoft spokesperson said. "Doing so also addresses feedback from the European Commission by providing multinational companies more flexibility when they want to standardize their purchasing across geographies."

This is not the first time Microsoft has faced antitrust scrutiny. In 1998, the Justice Department sued the company for using its dominance of the Windows platform to stifle competition from rival web browsers, eventually leading to concessions that loosened Microsoft's control over software installed on computer manufacturers' products.

However, analysts believe that the separation of Teams from Office may not have as dramatic an impact as the browser concessions. "Enterprise products are a different beast and Teams is so embedded into workflows that I don't think this has that same impact," said RBC Capital Markets analyst Rishi Jaluria.

According to data from market intelligence firm Sensor Tower, Microsoft Teams' mobile app Monthly Active Users in the first quarter of 2024 remained relatively flat compared to the fourth quarter of 2023, both at 19 million, following the unbundling of Teams from the Microsoft 365 and Office Suites in Europe in Oct. 2023.

Microsoft announced in a blog post the introduction of a new lineup of commercial Microsoft 365 and Office 365 suites that do not include Teams in regions outside the EEA and Switzerland, as well as a new standalone Teams offering for Enterprise customers in those regions. Starting April 1, customers can either continue with their current licensing deal, renew, update, or switch to the new offers. Prices for Office without Teams range from $7.75 to $54.75 depending on the product, while Teams Standalone will cost $5.25, though figures may vary by country and currency.

Despite the unbundling, some analysts believe that Microsoft's move may not be enough to stave off EU antitrust charges, which are likely to be sent to the company in the coming months. Rivals have criticized the level of the fees and the ability of their messaging services to function with Office Web Applications in their own services.

"This move may not completely ward off further regulatory scrutiny, but showing regulators Microsoft is willing to be proactive could still soften the stance by regulators," said Gil Luria, a senior software analyst at D.A. Davidson.

Microsoft has faced significant EU antitrust fines in the past decade, totaling 2.2 billion euros ($2.4 billion) for tying or bundling two or more products together. If found guilty of antitrust breaches, the company risks a fine of up to 10% of its global annual turnover.