Microsoft Unbundles Teams From Office Suite In A Bid To Address Antitrust Probe

Published 21 days ago
By Forbes | Siladitya Ray
Microsoft Services Down For Tens Of Thousands Around World
(Photo by Jaap Arriens/NurPhoto via Getty Images)

TOPLINE

Microsoft will split up its workplace messaging and video calls app Teams from its Office platform globally, the company told Reuters early on Monday, mirroring a move it undertook in the European Union last year as it attempts to avoid being penalized by the bloc’s antitrust regulators.

KEY FACTS

In August last year, Microsoft announced it would unbundle Teams from its Microsoft 365 subscription—which includes its Office suite of productivity software like Word, Excel and PowerPoint—in the EU and offer the messaging service as a standalone subscription.

The tech giant told Reuters Monday it will enact the change for all its customers worldwide “to ensure clarity,” and businesses can now choose slightly cheaper Microsoft 365 plans without Teams.

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The company said its decision was based on feedback from the European Commission to help global companies “standardize their purchasing across geographies.”

Forbes has reached out to Microsoft for a comment.

KEY BACKGROUND

The European Commission, the EU’s executive arm, opened an antitrust investigation into Microsoft in July last year. The commission said the investigation intended to assess whether the company “breached EU competition rules by tying or bundling its communication and collaboration product Teams to its popular suites for businesses Office 365 and Microsoft 365.” The executive body expressed concerns about Microsoft “abusing” the market dominance of its Office productivity software to restrict competition for “communication and collaboration products.” The investigation followed a complaint filed against Microsoft and Teams by its rival messaging platform Slack. Microsoft responded by unbundling Teams from its office productivity suite for EU customers in August. At the time, the company said it was taking “meaningful steps” to address the commission’s concerns and had gained clarity “from extensive and constructive discussions” with the executive body.

WHAT TO WATCH FOR

It is unclear if Microsoft’s latest actions are enough to fend off an antitrust fine from the EU. The commission had particularly expressed concern that Microsoft was giving Teams a “distribution advantage” over rivals by “not giving customers the choice” on whether they want to include Teams in their Office subscription. The unbundling will likely assuage that issue, but the commission had also raised a red flag about Microsoft possibly limiting “interoperability between its productivity suites” and rival messaging apps. If the investigators are unsatisfied with the remedies and find Microsoft guilty of antitrust breaches, the company could face fines as high as 10% of its global annual turnover.

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BIG NUMBER

$2.37 billion (€2.2 billion). That is the quantum of antitrust fines Microsoft has faced in the European Union in the past decade, the Reuters report added.

FURTHER READING

Microsoft to separate Teams and Office globally amid antitrust scrutiny (Reuters)