Microsoft to Unbundle Microsoft Teams and Office 365 Globally Amidst Antitrust Accusations

• After unbundling Microsoft Teams and Office 365 in the EU and Switzerland last year, the tech giant has decided to offer the products separately globally
• This move is expected to help it avoid antitrust fines from the EU Commission, although some sources suggest it might not be enough
• The new changes will be effective from April 1, 2024

On Monday (1st April, 2024), Microsoft announced that it has decided to separate Microsoft Teams from the Office suite globally and sell the two individually, amidst antitrust concerns. The company already unbundled the two products in the EU and Switzerland 6 months ago (on 31st August 2023) to avoid possible EU antitrust violations.

The news was confirmed through an official blog post by the company that said that it is introducing a new version of Office 365 and Microsoft 365 which does not contain Microsoft Teams. And for those companies that want Microsoft Teams, a standalone version of the product will be available.

To ensure clarity for our customers, we are extending the steps we took last year to unbundle Teams from M365 and O365 in the European Economic Area and Switzerland to customers globally.Microsoft spokesman

By doing so, Microsoft is trying to comply with the feedback from the European Commission that said companies should have the flexibility to pay only for tools they want to use instead of the whole bundle.

• The changes will be effective from April 1. Old customers can either continue, renew, or change their current licensing deal.
• For new commercial customers, Microsoft Office (without Teams) will be available at a price between $7.75 to $54.75, depending on the plan. Plus, Teams alone would be available at $5.25. The prices can change depending on your country/region.

Read more: Congress bans Microsoft CoPilot from staff devices as it doesn't meet government security standards

How Did Microsoft Come under the European Commission's Radar?

Microsoft Teams was added to Office 365 in 2017 and quickly gained traction during the pandemic-so much so that it successfully replaced Skype for Business. This, however, did not go down well with its competitors who began to argue that it was the bundling of the products that gave Microsoft an unfair advantage.

Slack (owned by Salesforce), which is one of the biggest rivals of Microsoft Teams, said that the customers were the ultimate victims here. It argued that users are being forced to use Microsoft Teams simply because they want to use Office 365-and they can't remove it even if they want to. Furthermore. Microsoft was accused of hiding the true cost of this bundle from its Enterprise users.

So, in 2020, Slack filed a filed complaint against Microsoft which led the European Commission to open a formal investigation to assess the charges.What Happens Next?

Microsoft has put a lot of effort into ensuring that it doesn't breach the EU's antitrust laws. Even when the formal probe was announced, the company pledged its cooperation and said it would work with the commission to find a mutual solution. However, some sources believe this might not be enough.

Many rivals have been continuously complaining about Microsoft's fee structure and compatibility issues between their own messaging platforms and Microsoft Office Web Applications.Microsoft might be sent another antitrust chargesheet in the coming months.

Microsoft has already had multiple troubles in the past with the European Commission for tying two or more products together. Over the last decade alone, the company racked up a fine of 2.2 billion euros ($2.4 billion) for breaking antitrust laws. Moreover, just a month ago, Microsoft's investment in Mistral AI came under EU antitrust scrutiny as well.

So, if Microsoft found breaking the antitrust laws again this year, the price will be much higher, maybe even up to 10% of its global annual revenue.

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