Microsoft (MSFT, Financial) is witnessing a potential easing of antitrust pressure from the European Union (EU), as insiders suggest the EU might accept Microsoft's new adjustment proposal for its Office and Teams product bundle, possibly avoiding hefty fines. This development comes amid heightened tensions over tech regulation between the US and EU, drawing significant market attention. Microsoft has been under EU antitrust scrutiny since 2020, when Salesforce's (CRM) Slack accused Microsoft of unfair competition by bundling Teams with Office. In 2023, German competitor alfaview filed similar complaints, amplifying regulatory pressure.
To address these concerns, since 2023, Microsoft has been selling Teams separately from Office, cutting the Office price by 2 euros and pricing standalone Teams at 5 euros monthly. Microsoft further widened the price difference in February to counter competitor criticism. EU regulators plan to conduct a market test in the coming months, consulting competitors and users before deciding on accepting Microsoft's proposal. Market feedback and other external factors will influence the final outcome.
Microsoft's proposal also aims to enhance product interoperability, allowing competitors to develop compatible applications more easily, reducing monopoly concerns. Historically, Microsoft has faced fines totaling approximately 2.2 billion euros (around 2.5 billion USD) due to bundling and anti-competitive actions. This case could set a precedent for how major tech companies handle regulatory pressure.
