Microsoft has announced plans to unbundle its popular video conferencing app Teams from its suite of Office products to head off the possibility of an EU antitrust fine.
The proposed changes follow an in-depth investigation launched by the European Commision last month into the tech giant’s bundling of Teams within its Office products.
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Salesforce, the owner of rival messaging app Slack, made a complaint against the bundling of Teams in 2020, claiming Microsoft was hurting competition and abusing its market position.
“The Commission is concerned that Microsoft may be abusing and defending its market position in productivity software by restricting competition in the European Economic Area (‘EEA’) for communication and collaboration products,” the European Commission said last month, announcing the probe.
Teams was added to Microsoft’s Office 365 in 2017 for free. Slack claimed this had forced the application to be installed “for millions, blocking its removal, and hiding the true cost to enterprise customers”.
The claims were initially pushed back by Microsoft. Teams soared to popularity during the pandemic and was used by “record numbers”.
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By GlobalDataHowever, the EU competition watchdog said Microsoft’s first concessions of the complaint had failed to successfully address concerns.
Nanna-Louise Linde, Microsoft’s vice president for European government affairs, confirmed on Thursday that the tech giant was announcing “proactive changes that we hope will start to address these concerns in a meaningful way, even while the European Commission’s investigation continues and we cooperate with it”.
One of the two major changes, which will both come into effect from October, will allow customers to choose a business suite without Teams at a price less than with Teams included.
The other change will seek to make “interoperability easier between rival communication and collaboration solutions and Microsoft 365 and Office 365 suites,” according to Linde.
Microsoft under threat by EU antitrust regulators
Microsoft has racked up a bill of over $2bn in EU antitrust fines over the past ten years for bundling products together. The move to unbundle Teams and Office marks a more cautious approach with regulators and watchdogs for the US tech giant.
According to research firm GlobalData, big tech companies like Microsoft, Amazon and Apple are “highly exposed” to the antitrust regulation of the EU’s new Digital Market Act (DMA),
“While Microsoft and Apple are less at risk from data privacy issues, they are both highly exposed to antitrust regulation and meet the criteria to qualify as gatekeepers under the EU’s new antitrust legislation,” GlobalData said.
The EU’s flagship antitrust legislation, the DMA, continues to pose a substantial risk to big tech who dominate a lot of market share.
“[The DMA] came into force in May 2023 but is expected to be enforced starting from March 2024 with fines of up to 10% of a “gatekeeper’s” global turnover,” GlobalData said.
Adding: “Amazon, Meta, Apple, Alphabet, and Microsoft all meet the criteria to qualify as large online platforms, and all will need to comply with a list of obligations or risk incurring hefty fines.”
