Microsoft to Unbundle Teams Software From Office Suites to Appease EU Regulators

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Fatima Attarwala
Fatima Attarwala
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Fatima Attarwala is a business news writer and editor with a decade of experience researching, analyzing, and commenting on issues influencing the economy.
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Published August 31, 2023
The logo of the international hardware and software developer Microsoft can be seen on the facade of an office building.

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In response to an ongoing European Commission anti-competition investigation, Microsoft (MSFT) plans to unbundle its Teams app from Office suite offerings in EU markets starting Oct. 1.

KEY TAKEAWAYS

  • Microsoft will unbundle Teams from its suites beginning Oct. 1 in response to an anti-competition investigation.
  • Enterprise customers can buy Microsoft 365 subscriptions without Teams at €2 ($2.17) less per month. They can subscribe to Teams alone for €5 ($5.42) per month.
  • Microsoft plans to improve operability with rival software, allowing it to integrate into Exchange, Outlook, and Teams.
  • However, these measures may not be enough to stave off charges by the European Commission.

Microsoft 365 and Office 365 subscriptions are the company's workplace software bundles that include programs like Word, Excel and PowerPoint. The bundles will be offered at a lower monthly rate and will not include video call software Teams, the company said Thursday. Plans will be €2 ($2.17) less per month or €24 ($26.02) less per year. Teams will be available on its own for €5 ($5.42) per month or €60 ($65.04) per year.

Last month, EU regulators opened an antitrust investigation into how Microsoft was packaging its Teams after Salesforce's Slack filed an anti-competition complaint. Slack accused Microsoft of abusing its market dominance and illegally tying Teams to its other Office products.

The changes, largely targeted toward large businesses, will affect new subscribers in the EU, Iceland, Liechtenstein, Norway and Switzerland. Existing users in those countries will have the option to renew their suites as-is or switch to a plan without Teams. A suite including teams will remain an option for small businesses.

Additionally, Microsoft plans to improve its compatibility with rival software such as Zoom and Slack, allowing them to integrate into Exchange, Outlook and Teams. Better mechanisms that enable third-party solutions will allow other programs to open and edit documents created in programs like Word, Excel, and PowerPoint.

According to Nanna-Louise Linde, Vice President of Microsoft's European Government Affairs, the unbundling is a first step to address these allegations, but not necessarily the entire solution.

The European Commission has not commented on Microsoft's solution and may formally charge the tech giant in autumn if additional measures are not taken.

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  1. Microsoft. "Microsoft announces changes to Microsoft 365 and Office 365 to address European competition concerns."

  2. The Verge. "EU opens Microsoft antitrust investigation into Teams bundling."

  3. The Verge. "Slack files competition complaint against Microsoft in the EU."

  4. Reuters. "Microsoft to unbundle Teams from Office, seeks to avert EU antitrust fine."

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