Microsoft plans to globally segregate Teams and Office amidst antitrust scrutiny.
In the last ten years, Microsoft has accrued fines totaling $2.4 billion from EU antitrust regulators for bundling or tying two or more products together.
On Monday, Microsoft announced that it would be selling its chat and video app Teams separately from its Office suite globally. This decision comes six months after the company separated the two products in Europe, aiming to avoid potential fines from EU antitrust regulators.
The European Commission initiated an investigation into Microsoft’s bundling of Office and Teams following a complaint in 2020 from Slack, a competing workspace messaging app owned by Salesforce.
Teams, initially introduced for free as part of Office 365 in 2017, replaced Skype for Business and gained popularity during the pandemic, particularly for its video conferencing capabilities.
However, competitors argue that bundling these products provides Microsoft with an unfair edge. Last year, on August 31, the company commenced selling the products separately in the EU and Switzerland.
“We are extending the measures implemented last year, which involved separating Teams from M365 and O365 in the European Economic Area and Switzerland, to customers worldwide to ensure transparency for our clientele,” stated a Microsoft spokesperson.
“This action also responds to feedback from the European Commission by offering multinational corporations greater flexibility in standardizing their procurement processes across different regions.”
In a blog post, Microsoft announced the introduction of a fresh range of commercial Microsoft 365 and Office 365 packages that exclude Teams for areas beyond the European Economic Area (EEA) and Switzerland. Additionally, they unveiled a new standalone Teams option tailored for enterprise clients in those regions.
From April 1 onwards, customers have the option to maintain their existing licensing agreement, renew, upgrade, or transition to the new offerings.
For new commercial customers, Office prices excluding Teams will range from $7.75 to $54.75 (approximately Rs. 646 to Rs. 4,566) depending on the product, while the standalone Teams subscription will be priced at $5.25 (approximately Rs. 437). Prices may differ based on country and currency. The company has not revealed pricing details for current bundled products.
Despite Microsoft’s efforts to unbundle its products, it may not be sufficient to prevent EU antitrust charges, which are expected to be issued against the company in the coming months. Sources indicate that rivals are critical of the fees charged and the compatibility of their messaging services with Office Web Applications.
Having accumulated EUR 2.2 billion ($2.4 billion or approximately Rs. 20,016 crore) in EU antitrust fines over the past decade for bundling multiple products, Microsoft faces the risk of a fine of up to 10 percent of its global annual turnover if found guilty of antitrust violations.
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