Microsoft unbundles Teams from Office

 Rivals argue that more may be required to avoid potential EU antitrust fines.

These proposed changes follow a European Commission investigation into Microsoft's bundling of Office and Teams, initiated after a 2020 complaint by Salesforce-owned (CRM.N) workspace messaging app Slack. Microsoft's announced actions parallel preliminary concessions that previously failed to address regulatory concerns. The EU competition enforcer acknowledged Microsoft's announcement without further comment.

Sources familiar with the matter told Reuters last month that unless Microsoft strengthens its offering, the Commission could formally charge the company in the autumn.

Teams was incorporated into Office 365 in 2017 at no additional cost, eventually replacing Skype for Business and gaining popularity during the pandemic, especially for video conferencing.

Nanna-Louise Linde, Microsoft's Vice President for European Government Affairs, stated in a blog post, "Today we are announcing proactive changes that we hope will start to address these concerns in a meaningful way, even while the European Commission's investigation continues, and we cooperate with it."

She explained that these changes aim to tackle two EU concerns: "that customers should be able to choose a business suite without Teams at a price less than those with Teams included, and that we should do more to make interoperability easier between rival communication and collaboration solutions and Microsoft 365 and Office 365 suites."

Effective from October 1, these changes will be applicable in the EU and Switzerland.

Microsoft's core enterprise customers, constituting a significant portion of its commercial business in Europe, will have the option to switch to an Office version that excludes Teams at a price €2 per month lower than the one including Teams. New enterprise customers can purchase Teams as a standalone product for €5 per month.

To aid customers and independent software vendors seeking to transfer data from Teams to other products, new support resources will be introduced.

Microsoft will also develop a method for hosting Office web applications within competing apps and services, similar to its approach with Teams.

Salesforce, the owner of Slack, had no further comments on the matter.

Rivals argue that Microsoft's current proposal is unlikely to satisfy the EU antitrust watchdog. An industry source noted, "This is playing to the gallery. I don't think the Commission will appreciate it. There is nothing incremental in the offer."

For the U.S. tech giant, the stakes are significant, having incurred €2.2 billion ($2.40 billion) in EU antitrust fines in the previous decade for bundling two or more products, but subsequently adopting a more conciliatory approach with regulators.