Microsoft (MSFT, Financial) has proposed to separate its Office 365 and Microsoft 365 software suites from the Teams communication app in response to competition concerns from European regulators. The European Commission announced that Microsoft has committed to addressing the issues related to bundling Teams with widely-used productivity tools like Word and Outlook. This move aims to avert potential hefty antitrust fines from the EU.
According to Microsoft's proposal, the company will introduce versions of Office 365 and Microsoft 365 without Teams, offering them at a lower price. Customers will also have the option to switch to these versions even under existing contracts. Additionally, Microsoft has pledged to enhance interoperability between Teams competitors and other Microsoft products, allowing customers to migrate data from Teams to rival products more easily.
This development follows a legal complaint filed by Slack in 2020, alleging that Microsoft's bundling of Teams with its productivity suite constituted an abuse of market power. Slack was acquired by Salesforce in 2021 for $27.7 billion. Salesforce's President and Chief Legal Officer highlighted the need for binding and effective remedies to address Microsoft's anti-competitive conduct.
Microsoft's latest commitments come after earlier promises in 2023 to separate Teams from Office and offer Microsoft 365 without the chat and video conferencing services at a discounted rate. This announcement marks Microsoft's ongoing efforts to resolve its dispute with the EU and avoid significant antitrust penalties.
