Brussels and Microsoft lay down their arms: Teams will be unbundled from Office

Brussels – The European Commission accepts competition commitments made by Microsoft: two years after opening an investigation for abuse of a dominant position, the US giant will now have to unbundle Teams (a well-known video conferencing app) from the Office package. With today’s decision, “we make binding for seven years or more Microsoft’s commitments to put an end to its tying practices that may be preventing rivals from effectively competing with Teams,” said Teresa Ribera, executive vice-president of the European Commission.

In 2023, Slack Technologies raised concerns that Bill Gates’ company was selling the video conferencing app as part of the popular Microsoft 365 or Office 365 packages. When Teams was launched in 2019, Microsoft included it by default in Office 365 and Microsoft 365, suites widely used by corporate customers.

Until now, purchasers have been denied the option to purchase a package without Teams, essentially being forced to buy it together with Word, Excel, and PowerPoint. In its preliminary determination, the Commission determined that Microsoft was dominant in the worldwide market for applications for professional use. Since 2019, Microsoft has leveraged its position by integrating its new product, Teams, with its market-leading applications. According to the European authorities, this gave it a significant competitive advantage by denying customers the choice of using a competitor. 

Today, the American giant made a binding commitment to offer customers purchasing Office 365 and Microsoft 365 a package without Teams at a significantly lower price. Additionally, existing customers will have the opportunity to switch to a new subscription without Teams, and there will be greater interoperability between Microsoft and its competitors. 

The operational modalities of this agreement are possible thanks to Article 9(1) of Regulation 1/2003, which enables companies under investigation to offer commitments to meet the concerns of EU institutions. If it finds these remedies satisfactory, the Commission makes them binding as in this case. It had already happened in 2022, when the Commission had concluded an understanding with Amazon to improve competition on the website.