In a significant shift, Microsoft has announced its decision to stop bundling its Teams videoconferencing app with its Office software in Europe, a move that appears to be aimed at averting antitrust penalties from regulators. The tech behemoth also indicated that measures would be implemented to facilitate the coexistence of its software with competing products, marking a strategic concession in the face of heightened regulatory scrutiny.
The announcement comes hot on the heels of the European Union’s Executive Commission’s formal investigation launched last month. Microsoft has been under the Commission’s microscope over concerns that the amalgamation of Teams with Office could potentially give the company an unfair competitive advantage. The probe was instigated by a complaint from Slack Technologies, a competitor in the workplace messaging software market, which accused Microsoft of leveraging its market dominance to quash competition, allegedly contravening EU laws.
Microsoft to Unbundle Teams App from Office Suite in Europe
Move Aimed at Addressing Antitrust Concerns
In a preemptive move aimed at averting antitrust penalties, Microsoft has announced that it will cease to package its Teams video conferencing app with its Office software suite in Europe. In addition, the tech giant will implement measures to facilitate the integration of competing products with its software.
EU Investigation and Slack Technologies’ Complaint
This decision follows a month after the European Union’s executive Commission, the top competition regulator for the 27-member bloc, initiated an official investigation. The Commission expressed concerns that Microsoft’s practice of bundling Teams with Office provided the company with an unjust advantage over competitors.
The probe was instigated by a 2020 complaint from Slack Technologies, known for its widely used workplace messaging software. Now owned by business software producer Salesforce, Slack accused Microsoft of abusing its market position to eliminate competition. Slack argued that Microsoft was violating EU laws by unlawfully coupling Teams with its Office suite, which includes Word, Excel, and Outlook.
Proactive Changes to Address Concerns
Microsoft’s VP of European government affairs, Nanna-Louise Linde, announced these proactive changes in a blog post, expressing hope that these modifications would begin to address these concerns in a significant manner, even as the EU Commission’s investigation continues.
However, it remains uncertain if these concessions will sufficiently address the Commission’s concerns. A Commission spokesperson noted Microsoft’s announcement but declined to provide further comments.
New Pricing and Interoperability Measures
Linde stated that these changes were made to address EU concerns that customers should have the option to purchase Office without Teams at a lower price and that Microsoft should improve interoperability with rival communication and collaboration software.
The changes, which will come into effect on Oct. 1, will be applicable in the 30-member European Economic Area and Switzerland. Microsoft will reduce the price of the Office package without Teams by 2 euros ($2.17) per month for its principal enterprise customers. New business customers will have the option to buy a separate standalone version of Teams for 5 euros a month.
Microsoft’s Commitment to Support Software Developers
Microsoft also commits to providing more support to software developers. This includes additional information on data extraction from Teams for use in other software and simplifying the process for competitors to use Microsoft’s functionality instead of creating their own.
Tech Giants Under Scrutiny in Europe
Microsoft and other US tech giants like Google, Apple, Amazon, Facebook and Instagram owner Meta are under increased scrutiny from Brussels due to concerns about their market dominance. Microsoft, which last faced an EU antitrust investigation over a decade ago, is also attempting to secure its $69 billion acquisition of video game maker Activision, a deal approved by the Commission but currently stalled in Britain.
Takeaways
In a global tech industry that is increasingly scrutinized for monopolistic practices, Microsoft’s decision to separate Teams from its Office suite in Europe could be seen as a tactical move. It not only addresses immediate antitrust concerns but also sends a strong message about the company’s willingness to adapt to regulatory pressures. This could set a precedent for other tech giants facing similar scrutiny. However, it remains to be seen how this move will affect Microsoft’s competitive position in the European market.
