Microsoft will likely avoid EU antitrust fine after unbundling Teams from Office

When it comes to Microsoft's entanglements with regulators, all eyes were on the Activision Blizzard King acquisition on behalf of Xbox earlier this decade. Microsoft went head-to-head with the Competition and Market Authority (CMA) of the UK and the US's Federal Trade Commission (FTC) as it moved to close the ABK deal.

Ultimately, Microsoft's $69 billion acquisition of Activision Blizzard went through and an appeal to the Federal Trade Commission (FTC) was denied.

But the gaming sector of Microsoft is not the only department currently under a regulatory microscope. The European Commission (EC) is looking into whether Microsoft's bundling of the video conferencing software Teams with productivity-based app subscription Office 365 was legal.

Reportedly, the EC and Microsoft are at odds over whether the pricing of Teams limits opportunities for fair competition from similar video conferencing apps such as Slack and Zoom. Slack filed a complaint with the EU in 2020, claiming that Microsoft was "force installing [Teams] for millions, blocking its removal, and hiding the true cost to enterprise customers."

In April 2023, it was reported that Microsoft was considering allowing users to install Office without installing Teams in an effort to appease regulators and avoid additional scrutiny or official investigations by the EC.

Microsoft unbundled Teams from Office in 2023, giving organizations the option to purchase Office plans without Teams or Teams as a standalone service. The tech giant later adjusted pricing to further differentiate Office plans with or without Teams.

According to a statement from Microsoft in 2023, the company was "open to pragmatic solutions that address its [The EC's] concerns and serve customers well." Meanwhile, members of the European Parliament put pressure on the EC to launch an investigation stating that it had been three years since Slack's initial complaint.

It has now been five years since Slack first raised concerns.

Slack is not the only competitor to lodge antitrust complaints at Microsoft. Google and AWS both have accused the Redmond-based tech giant of anticompetitive efforts regarding the cloud market and utilizing "licensing taxes." In 2008 Microsoft was charged $1.35 billion in fines for failing to comply with a 2004 antitrust ruling that found the tech company was charging exorbitant fees to its competitors for interoperability information.

While it sounds likely that Microsoft will avoid an antitrust fine over Teams and Office, EU regulators have not made a final decision. We will have to see if they are swayed by any feedback from Microsoft rivals or other factors before making a ruling.