Microsoft [MSFT:US] will spin off Teams, its chat and video app, from its Office product globally, followingstrengthened EU antitrust scrutiny over this bundle salesmodel, as reported by Reuters on April 1. The company announced that customers buying Office subscriptions starting this week will no longer get Teams bundled with the service. The announcement came six months after Microsoft unbundled the two products in the European Economic Area and Switzerland to avert a possible EU antitrust penalty. A Microsoft spokesperson said the move aims to bring clarity to customers, address feedback from the European Commission, and provide more flexibility for multinationals seeking to standardize their purchasing across geographies. However, despite these changes, it is still possible that the Commission charge the company with antitrust violations.

The European Commission has been investigatingMicrosoft’s tying of Office and Teams since 2020 when Slack, a workspace messaging app owned by Salesforce [CRM:US], filed an anticompetitive complaint against Microsoft. Slack alleged that Microsoft was abusing its market dominance to eliminate competition by illegally combining Teams with its Office suite. In response to the complaint, the Commission opened a formal investigation into Microsoft, citing concerns that the bundling could give it an unfair edge over rivalries. Over the past decade, Microsoft has faced EU antitrust penalties amounting to USD2.4bn for bundling two or more products together. If found guilty of antitrust breaches, a company could face fines of up to 10% of its global annual turnover under the EU antitrust rules.

Sources:

https://www.reuters.com/technology/microsoft-separate-teams-office-globally-amid-antitrust-scrutiny-2024-04-01/

https://apnews.com/article/microsoft-teams-office-bundle-unbundled-7ea64d625a32e65e18b34c14d467af28

https://www.theverge.com/2024/4/1/24117785/microsoft-teams-office-split-eu-regulation-antitrust-investigation