Microsoft splits Teams from Office Suite after EU pressure

In response to mounting antitrust scrutiny, Microsoft announced on Monday that it plans to decouple its chat and video app, Teams, from its Office suite globally. This move comes six months after a similar unbundling effort in Europe aimed at avoiding potential EU antitrust penalties.

The European Commission initiated an investigation into Microsoft’s bundling of Office and Teams following a complaint filed in 2020 by Salesforce-owned competitor, Slack, which offers a competing workspace messaging app.

Teams, initially integrated into Office 365 at no extra charge in 2017, replaced Skype for Business and gained significant traction during the pandemic, particularly for its video conferencing capabilities.

Critics argue that bundling these products provides Microsoft with an unfair advantage in the market. Responding to feedback from the European Commission, Microsoft began selling the products separately in the EU and Switzerland on August 31 last year.

In a statement, a Microsoft spokesperson emphasized the company’s commitment to providing clarity for customers and addressing regulatory concerns. The decision to unbundle Teams from Microsoft 365 and Office 365 globally aims to offer multinational companies greater flexibility in their purchasing decisions across different regions.

“To ensure clarity for our customers, we are extending the steps we took last year to unbundle Teams from M365 and O365 in the European Economic Area and Switzerland to customers globally,” a Microsoft spokesperson said. “Doing so also addresses feedback from the European Commission by providing multinational companies more flexibility when they want to standardize their purchasing across geographies.”

Microsoft also outlined its plans to introduce new commercial Microsoft 365 and Office 365 suites that exclude Teams outside the European Economic Area (EEA) and Switzerland, along with a standalone Teams offering for Enterprise customers in those regions.

Starting April 1, customers will have the option to continue with their existing licensing agreements or transition to the new offerings, CNBC reported.

Meanwhile, prices for Office without Teams will vary between $7.75 and $54.75 for different products, while Teams Standalone will be priced at $5.25. Pricing details for existing packaged products were not disclosed.

Despite these efforts, Microsoft’s unbundling may not shield it from potential EU antitrust charges, with rivals criticizing the fees and interoperability of their messaging services with Office Web Applications.

Over the past decade, Microsoft has faced significant EU antitrust fines totaling 2.2 billion euros ($2.4 billion) for similar bundling practices, risking further penalties amounting to as much as 10% of its global annual turnover if found guilty of antitrust violations.