Microsoft (MSFT, Financial) has proactively decided to separate its Office 365 and Microsoft 365 software bundles from the Teams workplace communication app to alleviate competition concerns raised by European regulators. The European Commission acknowledged Microsoft's commitment to address issues surrounding the bundling of Teams with widely used productivity tools like Word and Outlook. As part of the proposal, Microsoft will offer discounted versions of Office 365 and Microsoft 365 that do not include Teams, allowing customers to switch under existing contracts to versions without Teams.
Additionally, Microsoft has pledged to enhance interoperability for Teams competitors with other Microsoft products and enable customers to migrate their data from Teams to rival products. This decision emerges from constructive discussions over several months between Microsoft and the European Commission.
The move follows a 2020 lawsuit initiated by workplace communication app Slack, which accused Microsoft of leveraging its market power by bundling Teams with its popular Office productivity suite. The European Union has been reviewing this practice since. In 2021, Slack was acquired by Salesforce (CRM) for $27.7 billion, and Salesforce's legal team highlighted a need for binding and effective remedies to curb Microsoft's anti-competitive practices.
