Microsoft avoided a potentially massive European Union antitrust fine by agreeing to sell its Office suites without its Teams communication app at lower prices and committing to a series of pro-competition measures. The decision resolves a multiyear investigation launched after Slack Technologies, now owned by Salesforce, filed a complaint in 2020 accusing Microsoft of illegally bundling Teams with Office 365 and Microsoft 365.
The European Commission said Friday that Microsoft's commitments address concerns that tying Teams to its popular productivity software - including Word, Excel, PowerPoint and Outlook - gave the company an unfair advantage over rivals. "The commitments address the Commission's concerns related to the tying of Microsoft Teams to the company's popular productivity applications," the Commission said.
Under the agreement, Microsoft will:
- Offer versions of Office and Microsoft 365 without Teams at a reduced price, widening the price gap by 50% compared with versions that include Teams.
- Allow customers with long-term licenses to switch to non-Teams suites.
- Provide interoperability between Teams competitors and key Microsoft products.
- Permit customers to export Teams data to rival services to enable switching.
The price gap will range from €1 to €8 per user and remain in effect for seven years, while interoperability and data portability commitments will last for 10 years. Microsoft implemented a regional unbundling in Europe in 2023 but will now apply the changes globally.
"Today's decision therefore opens up competition in this crucial market, and ensures that businesses can freely choose the communication and collaboration product that best suits their needs," EU antitrust chief Teresa Ribera said in a statement.
Nanna-Louise Linde, Microsoft's vice president for European government affairs, said: "We appreciate the dialogue with the Commission that led to this agreement, and we turn now to implementing these new obligations promptly and fully."
Rival companies welcomed the outcome. "It sends an important signal for Europe's digital sovereignty: fair market conditions not only promote technological diversity, but also secure the long-term innovative strength of the European market," said Niko Fostiropoulos, CEO of German competitor alfaview, which filed a similar complaint last year.
Microsoft has previously paid €2.2 billion in EU antitrust fines for bundling products and other practices but has taken a more conciliatory approach in recent years. EU fines can reach up to 10% of a company's annual global revenue, meaning Microsoft faced a potential multibillion-dollar penalty had it not offered concessions.
