Microsoft has announced that it will separate its chat and video application, Teams, from its Office product, making it easier for competitors’ products to work with Microsoft software. The move is an attempt to prevent a potential antitrust fine from the European Union (EU).
This decision comes as a response to an investigation by the European Commission into Microsoft’s bundling of Office and Teams. The inquiry was initiated following a complaint from Slack, the workspace messaging app owned by Salesforce, in 2020.
The initial changes proposed by Microsoft did not address the concerns raised. The EU competition watchdog acknowledged Microsoft’s recent announcement but refrained from making further comments.
Teams was added to Office 365 in 2017 as a free app, eventually replacing Skype for Business. It gained significant popularity during the pandemic due to its video conferencing capabilities.
Commenting on these developments, Nanna-Louise Linde, Microsoft’s VP for European government affairs, stated in a blogpost that the company aims to address two key concerns of the EU: customers’ ability to choose a business suite without Teams at a lower price, and improving interoperability between Microsoft 365 and Office 365 suites and rival communication and collaboration solutions.
These changes will be effective from October 1st and will only apply in Europe and Switzerland.
Microsoft will lower the price of Teams for its core enterprise customers, offering it at a rate that is 2 euros less per month or 24 euros ($26.17) per year. This customer segment represents a significant portion of Microsoft’s commercial business in Europe.
New enterprise customers will have the option to purchase Teams as a standalone product for 5 euros per month or 60 euros per year. Existing enterprise customers who already have a suite that includes Teams can choose to keep it or switch to a suite without Teams.
In addition, Microsoft will introduce new support resources to aid customers and independent software vendors who wish to export data from Teams for use in other products. Furthermore, Microsoft will develop a method for hosting the Office web applications within competing apps and services, similar to the functionality already available for Teams.
This decision holds significant importance for the US tech giant, as it has been penalized with 2.2 billion euros ($2.40 billion) in antitrust fines by the EU over the past decade for bundling or tying multiple products together. However, in recent years, Microsoft has pursued a more cooperative approach with regulators.
($1 = 0.9175 euros)