The European Commission has wrapped up a long investigation into how Microsoft sells its productivity software. The main concern was about Microsoft including its Teams app in Office 365 and Microsoft 365 packages. The EU wanted to see if this practice unfairly limited competition from other collaboration tools. Instead of punishing Microsoft with a fine, the company agreed to make some changes that should level the playing field.

Microsoft’s new commitments include offering versions of its Office suites without Teams at a lower price. Customers who already have long-term licenses will be able to switch to subscriptions that don’t include Teams. The company also agreed to improve how Teams works with rival apps, making it easier to embed other collaboration tools and transfer data out of Teams if needed.

What Led to the Investigation

The probe started when Slack, now owned by Salesforce, filed a complaint in 2020. Slack argued that Microsoft was abusing its dominant position by bundling Teams with its Office products, giving Teams an unfair advantage over Slack. A second complaint came from a German videoconferencing company called alfaview in 2024. These complaints prompted the EU to look into Microsoft’s practices.

The EU’s initial findings suggested that Microsoft’s inclusion of Teams at no extra cost gave it a significant edge over competitors like Slack. Since Teams launched in 2017, it rapidly gained popularity, partly because it was bundled with Office and was free. The EU saw this as an abuse of market power, which led to the investigation.

Microsoft’s Changes and Future Commitments

By the end of the investigation, Microsoft agreed to legally binding commitments. The company will now sell Office and Microsoft 365 suites without Teams at a lower price. Customers with existing licenses will be able to switch to versions without Teams. Microsoft also promised to make Teams more compatible with rival apps, allowing better integration and data transfer.

The company will also let competitors embed Office apps like Word and Excel into their own platforms. This move aims to boost interoperability and give users more freedom to choose different tools. Microsoft’s commitments will last for seven years, with the interoperability rules in place for ten years.

Niko Fostiropoulos, CEO of alfaview, welcomed the decision. He believes it will make Europe’s digital market stronger and more diverse. The EU’s action shows how regulators are willing to step in to ensure fair competition. The investigation officially ended in 2023, after Microsoft unbundled Teams and reduced its prices for non-Teams versions in Europe and globally.

The EU’s focus was to prevent Microsoft from using its market power to push out rivals. The new rules will help smaller companies compete more fairly and encourage innovation across Europe’s tech landscape. Overall, this settlement marks a step toward a more balanced and competitive digital environment in the EU.

Inspired by

• https://www.computerworld.com/article/4056473/microsoft-ec-reach-deal-on-teams-app-bundling.html

Sources

• gmpg.org
• europa.eu
• alfaview.com
• asbpe.org
• eddie-ozzie.com