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Microsoft to Separate Teams and Office Globally Amid Antitrust Scrutiny: Report

Rivals argue that bundling the products gave Microsoft an unfair advantage

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Staff Writer, TLR

Published on April 2, 2024, 12:31:45

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microsoft, video app, teams, antitrust, lawsuit

Microsoft has announced plans to globally separate its chat and video app, Teams, from its Office product, following antitrust scrutiny.

The decision comes six months after the company unbundled the two products in Europe to avoid potential fines from the European Commission, which has been investigating Microsoft's tying of Office and Teams since a complaint filed in 2020 by Slack, a competing workspace messaging app owned by Salesforce.

Teams, originally added to Office 365 for free in 2017, replaced Skype for Business and saw increased popularity during the pandemic, particularly for its video conferencing capabilities. However, rivals argued that bundling the products gave Microsoft an unfair advantage.

To address concerns and provide clarity to customers, Microsoft has decided to extend the separation of Teams from Office globally, a move initially implemented in the European Economic Area and Switzerland on October 1 last year. The decision aims to offer multinational companies more flexibility in their purchasing decisions across different regions.

Analysts suggest that while Microsoft's previous concessions in response to antitrust scrutiny, notably regarding Internet browsers in 1998, led to significant changes in the market, the impact of separating Teams from Office might not be as dramatic given the entrenched nature of enterprise products like Teams.

Despite the separation, Microsoft's user base for Teams has remained relatively stable, according to data from Sensor Tower. The company has also introduced new commercial Microsoft 365 and Office 365 suites without Teams for regions outside the European Economic Area and Switzerland, along with standalone Teams offerings for enterprise customers in those regions.

Customers have the option to continue with their current licensing agreements or switch to the new offerings, with prices for Office without Teams ranging from $7.75 to $54.75 for existing customers and $5.25 for standalone Teams. However, exact pricing may vary by country and currency.

While Microsoft's efforts to unbundle Teams from Office may not fully alleviate antitrust concerns, proactive measures could potentially influence regulators' stance. The company faces the risk of significant fines, up to 10 per cent of its global annual turnover, if found guilty of antitrust breaches, having accumulated 2.2 billion euros ($2.4 billion) in EU antitrust fines over the past decade.

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