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Microsoft to unbundle Teams software in Europe in bid to abate EU concerns

TechnologyMicrosoft to unbundle Teams software in Europe in bid to abate EU concerns

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The Microsoft Teams displayed on a smartphone.

Sopa Images | Lightrocket | Getty Images

U.S. tech giant Microsoft on Thursday said it will unbundle its chat and videoconference service Teams from its Microsoft 365 productivity suite, in a bid to allay European Union antitrust concerns.

Starting Oct. 1 this year, Microsoft will sell the packages without Teams at a discounted price totaling a 24 euro ($26) per year reduction in the EEA (European Economic Area) and Swiss regions. Existing customers who already own a suite with Teams can choose to stay with their current package or migrate to a product without the videoconferencing app.

The subscription-based Microsoft 365 bundle, formerly known as Office 365, previously prized Teams as the crown jewel of its workplace-geared app offerings, which include Word and Excel. The Teams software debuted in 2017 and gained ground with users as it facilitated workplace text and video communication during the Covid-19 pandemic. Microsoft in March said it intended to roll out a new version of Teams that will be twice as fast as its predecessor.

European Union regulators had in July opened an antitrust investigation into Microsoft’s bundling of Teams with other Office products, citing anti-competitive concerns.

The probe, which is ongoing, marked the first EU antitrust investigation into Microsoft in over a decade, with a Salesforce-owned Teams rival Slack submitting a complaint to European authorities on competitiveness grounds in 2020. Salesforce did not immediately respond to a CNBC request for comment.

EU officials expressed concern that the Redmond tech titan “may grant Teams a distribution advantage by not giving customers the choice on whether or not to include access to that product when they subscribe to their productivity suites and may have limited the interoperability between its productivity suites and competing offerings.”

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Microsoft on Thursday pledged to also enhance resources on interoperability with Microsoft 365 and Office 365. It will also create mechanisms to host Office web applications within competing apps and services.

“We appreciate the clarity that has emerged on several of the concerns from extensive and constructive discussions with the European Commission. With the benefit of this clarity, we believe it is important that we start to take meaningful steps to address those concerns,” Nanna-Louise Linde, vice president of Microsoft European Government Affairs, said Thursday in a blog post.

“We believe these changes balance the interests of our competitors with those of European business customers, providing them with access to the best possible solutions at competitive prices,” she added, recognizing that the EU investigation is currently in its early stages.

An EU spokesperson told CNBC: “We take note of Microsoft’s announcement. We have no further comment to make.”

Microsoft is separately in the crosshairs of U.K. regulators, which blocked its original plans to take over gaming company Activision Blizzard on concerns of stifling competition in the nascent cloud gaming market. Microsoft last week submitted a new deal proposal for the acquisition, offering fresh concessions — which the U.K.’s Competition and Markets Authority will now study with a decision deadline of Oct. 18.

— CNBC’s Silvia Amaro contributed to this report

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