EU regulators are expected to accept a proposal from Microsoft that would resolve a long-running antitrust investigation into the bundling of its Teams app with Office, according to sources familiar with the matter who spoke to Reuters.
In June 2024, the European Commission formally charged the tech giant for disproportionately restricting competition in the market for communication apps by automatically bundling Teams with Office 365 and Microsoft 365 subscriptions.
Because Microsoft’s suite of productivity tools, which includes Excel, Outlook and PowerPoint, is the second most popular worldwide after Google Workspace, including Teams by default gives Microsoft a “distribution advantage.” Essentially, Teams gains immediate access to Office’s huge user base, regardless of whether it outperforms competing apps.
According to Reuters’ sources, Microsoft has proposed improved interoperability terms, allowing third-party communication apps to integrate more easily with the Office ecosystem and giving users the option to choose Teams alternatives.
In February, Microsoft also offered to widen the price differential between the Office bundle that included Teams and the one that didn’t, Reuters’ reported. This change could allow Teams alternatives at a lower price point to compete more effectively.
Before announcing its decision, the Commission will likely seek feedback from Microsoft’s rivals and customers on whether the proposal is sufficient, and the outcome could still change, the sources told Reuters.
How the charges against Microsoft came about
The charges against Microsoft were brought about through a Statement of Objections, which is a formal document outlining the Commission’s preliminary findings that a company may have violated EU antitrust laws. The Statement relates to two investigations into Microsoft.
The first was opened by the Commission in July 2023 after receiving a complaint by Slack alleging that Microsoft was “force installing (Teams) for millions, blocking its removal, and hiding the true cost to enterprise customers.” The complaint was made in July 2020 after the COVID-19 pandemic spurred a global transition towards working from home, and remote collaboration tools like Teams, Slack, and Zoom became essential.
In July 2023, alfaview, a German video conferencing solution provider, filed a complaint similar to Slack’s, and the European Commission launched a second probe as a result.
After the initial investigation was launched, Microsoft unbundled Teams from Office in Europe before enacting the change globally. It also reduced the price of the Office bundle that didn’t include Teams by €2 per month per user, and offered a standalone version of Teams for €5 per month per user. However, the Commission regards these changes as “insufficient” to restore competition.
Closing the Microsoft investigation could be good for the EU
The Commission would have more resources to dedicate to its antitrust investigations into Apple and Google if it accepts Microsoft’s proposals and closes the investigation, according to Reuters’ sources in February.
SEE: European Commission Examines Alphabet, Apple and Meta’s Walled Gardens Under the DMA
Doing so could also curry favour with the US. President Donald Trump has previously criticised the EU for its regulatory stance against Apple, Google, Meta, and other US tech firms. At the World Economic Forum in January, he said, “they’re American companies, and they shouldn’t be doing that,” and that “it’s a form of taxation,” while Vice President JD Vance disparaged Europe’s use of “excessive regulation” at the Paris AI Summit in February. The president is also no stranger to threatening the bloc with tariffs when unimpressed with its regulations.
