Microsoft to Separate Teams and Office Globally Amid Antitrust Scrutiny

Microsoft has racked up $2.4 billion in EU antitrust fines in the past decade for tying or bundling two or more products together.

By Reuters | Updated: 1 April 2024 14:38 IST

Microsoft to Separate Teams and Office Globally Amid Antitrust Scrutiny

Photo Credit: Reuters

Microsoft's new lineup of Microsoft 365 and Office 365 suites do not include Teams

Highlights

EU has been investigating Microsoft's tying of Office and Teams
Teams was added to Office 365 in 2017 for free
Rivals say bundling the products gives Microsoft an unfair advantage

Microsoft will sell its chat and video app Teams separately from its Office product globally, the US tech giant said on Monday, six months after it unbundled the two products in Europe in a bid to avert a possible EU antitrust fine.

The European Commission has been investigating Microsoft's tying of Office and Teams since a 2020 complaint by Salesforce-owned competing workspace messaging app Slack.

Teams, which was added to Office 365 in 2017 for free, subsequently replaced Skype for Business and became popular during the pandemic due in part to its video conferencing.

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Rivals, however, said packaging the products together gives Microsoft an unfair advantage. The company started selling the two products separately in the EU and Switzerland on August 31 last year.

"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 standardise their purchasing across geographies."

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Microsoft said in a blogpost that it was introducing a new lineup of commercial Microsoft 365 and Office 365 suites that do not include Teams in regions outside the EEA (European Economic Area) and Switzerland, and also a new standalone Teams offering for Enterprise customers in those regions.

Starting April 1, customers can either continue with their current licensing deal, renew, update or switch to the new offers.

For new commercial customers, prices for Office without Teams range from $7.75 to $54.75 (roughly from Rs. 646 to Rs. 4,566) depending on the product while Teams Standalone will cost $5.25 (roughly Rs. 437). The figures may vary by country and currency. The company did not disclose prices for current packaged products.

Microsoft's unbundling may not be enough to stave off EU antitrust charges which will likely be sent to the company in the coming months as rivals criticise the level of the fees and the ability of their messaging services to function with Office Web Applications in their own services, sources said.

Microsoft, which has racked up EUR 2.2 billion ($2.4 billion or roughly Rs. 20,016 crore) in EU antitrust fines in the past decade for tying or bundling two or more products together, risks a fine of as much as 10 percent of its global annual turnover if found guilty of antitrust breaches.

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