Microsoft Avoids EU Competition Fine After Teams Software Probe

‘Today’s decision therefore opens up competition in this crucial market,’ an EU official said.

Microsoft Teams app on July 26, 2021. Dado Ruvic/Illustration/Reuters

Microsoft avoided a European Union antitrust fine after the bloc accepted concessions the company made over how it bundles its Teams and Office 365 software packages, the European Commission said on Sept. 12.

The commission, which acts as the EU’s executive branch and antitrust regulator, launched an investigation into the Seattle-based tech giant in 2023 following a complaint by rival software company Slack Technologies, now part of the Salesforce brand.

In that complaint, Slack accused Microsoft of abusing its dominant position in the market by bundling together Teams, its video conferencing and messaging service, with its Office 365 package, containing applications such as Word, Excel, and PowerPoint, which are staples of many businesses.

In the wake of the initial complaint, Microsoft unbundled Teams from Office 365 for customers living in the EU, but the commission found, after its preliminary investigation in 2024, that these changes were insufficient and broader alterations were required to comply with the 27-nation bloc’s competition laws.

This prompted Microsoft to offer further commitments in May of this year.

Those commitments included keeping Teams and Office separate for seven years, and setting what Microsoft describes as “minimum price deltas” the company must maintain between the versions of the software when sold without and with Teams.

A market test conducted between May 16 and June 16, as well as additional commitments by Microsoft, satisfied the commission, which concluded that they would adequately address its concerns over competition in relation to the company.

Additional commitments included increasing by 50 percent the price difference between some Microsoft 365 and Office 365 suites without Teams and the versions with Teams, requiring Microsoft to display non-Teams options alongside Teams bundles on its websites, and publishing interoperability and data portability information on developer-facing sites.

The commission moved to make the commitments made by Microsoft legally binding.

“Organisations big and small across Europe and around the world rely heavily on videoconferencing, chat and collaboration tools, especially since the coronavirus pandemic,” EU Executive Vice-President for Clean, Just, and Competitive Transition Teresa Ribera said.

“With today’s decision, we make binding for seven years or more Microsoft’s commitments to put an end to its tying practices that may be preventing rivals from effectively competing with Teams. 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.”

Nanna-Louise Linde, a Microsoft vice president for European government affairs, told The Epoch Times in an emailed statement, “We appreciate the dialogue with the Commission that led to this agreement, and we turn now to implementing these new obligations promptly and fully.”