Microsoft unbundles Teams from Office after EU threaten antitrust fine

Microsoft will unbundle Teams, the chat and video messaging app, from its Office software package in an effort to stave off a potential antitrust fine in the European Union.

The concession comes a month after the European Commission opened an inquiry into the inclusion of Teams in the core Microsoft offering, saying it could unfairly restrict competition.

Brussels acted after a complaint from Slack, the rival platform now owned by Salesforce, which alleged in 2020 that Microsoft was preventing a level playing field by “force installing [Teams] for millions, blocking its removal and hiding the true cost to enterprise customers”.

Teams was added to Office 365 for free in 2017, eventually replacing Skype for Business, and became one of the biggest beneficiaries of the shift to working from home in the pandemic.

From October 1, new users of the Enterprise package in Europe who wish to use Teams will have to buy a standalone €5-a-month subscription on top of the core software suite. Existing corporate customers will be able to choose between continuing with their present arrangement or moving down to a package without Teams at a reduced monthly price.

Nanna-Louise Linde, Microsoft’s vice-president for European government affairs, said she hoped that the “proactive changes … will start to address these concerns in a meaningful way, even while the European Commission’s investigation continues”. She said the changes sought to address two concerns in Brussels “that customers should be able to choose a business suite without Teams at a price less than those with Teams included, and that we should do more to make interoperability easier between rival communication and collaboration solutions”.

A spokeswoman for the commission said: “We take note of Microsoft’s announcement.”

Microsoft will soon have to comply with the EU’s Digital Markets Act, which will force big technology companies that act as “gatekeepers” to comply with strict rules preventing them from locking customers into particular software ecosystems.

Technology groups can be fined up to 10 per cent of global turnover, or up to 20 per cent for repeat offences, if they do not comply with the European competition rules.

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Microsoft unbundles Teams from Office after EU threaten antitrust fine