Microsoft has avoided billions in potential EU antitrust fines after agreeing to unbundle its Teams collaboration app from Office 365 and Microsoft 365. The European Commission approved the move, ending a long-running investigation into whether Microsoft unfairly bundled Teams with its productivity suites.
The probe began in 2020 after Slack filed a complaint, accusing Microsoft of abusing its market dominance by giving Teams an unfair advantage. The Commission argued that deep integration with Office apps like Outlook, Word, Excel, and SharePoint made it harder for rival collaboration tools to compete.
To address these concerns, Microsoft will for the next seven years sell cheaper versions of Office 365 and Microsoft 365 without Teams, while allowing customers to pay more if they want to include the app. The company has also pledged to open key APIs for interoperability and enable data export from Teams for at least five years.
This agreement spares Microsoft potential fines of up to 10% of its global annual revenue, which could have amounted to more than $20 billion based on its $245 billion turnover last year. Instead, the deal ensures more choice for businesses while boosting competition in the enterprise collaboration market.
Slack and Alfaview, which filed complaints against Microsoft, have since withdrawn them following a successful EU market test. European Commission executive vice-president Teresa Ribera said the decision “opens up competition in this crucial market” and allows businesses to “choose the collaboration product that best suits their needs.”
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Microsoft welcomed the resolution. “We appreciate the dialogue with the Commission that led to this agreement, and we turn now to implementing these new obligations promptly and fully,” said Nanna-Louise Linde, vice president of European Government Affairs at Microsoft.
Why it matters:
The EU ruling forces Microsoft to reshape how it sells Office 365 worldwide. Businesses now have more freedom to select communication tools, while competitors like Slack gain a fairer shot in the enterprise software market.
