U.S. tech giant Microsoft has announced that it will unbundle its chat and videoconference service, Teams, from its Microsoft 365 productivity suite. The move comes in response to antitrust concerns raised by the European Union (EU). Starting from October 1 this year, Microsoft will offer packages without Teams at a discounted price, resulting in a €24 ($26) per year reduction in the European Economic Area (EEA) and Swiss regions. Existing customers who currently have a suite with Teams can choose to either retain their current package or migrate to a product that does not include the videoconferencing app.
Microsoft 365, previously known as Office 365, is a subscription-based bundle that includes popular workplace apps like Word and Excel. Initially, Teams was positioned as the flagship app within the suite, gaining increased popularity during the Covid-19 pandemic for its ability to facilitate seamless text and video communication in the workplace. However, concerns over potential anti-competitive practices led EU regulators to initiate an antitrust investigation into Microsoft’s bundling of Teams with other Office products in July.
The EU expressed concerns that Microsoft’s bundling strategy may grant Teams a distribution advantage and limit interoperability with competing offerings. In response to these concerns, Microsoft has committed to enhancing resources on interoperability between Microsoft 365 and Office 365. Furthermore, the company plans to develop mechanisms that allow Office web applications to be hosted within competing apps and services. Microsoft acknowledged the EU’s investigation and stated that it intends to take meaningful steps to address the concerns raised, emphasizing the importance of balancing the interests of competitors with those of European business customers.
The EU spokesperson provided a brief comment on Microsoft’s announcement, noting that they take note of the decision but have no further comments to make at this time. While the EU antitrust investigation is still ongoing, Microsoft continues to face regulatory challenges in other regions. In the UK, the Competition and Markets Authority previously blocked Microsoft’s plans to acquire gaming company Activision Blizzard over concerns of stifling competition in the cloud gaming market. Microsoft has since submitted a revised proposal for the acquisition, offering fresh concessions that are currently being studied by the UK regulatory authority, with a decision deadline set for October 18.
Microsoft’s decision to unbundle Teams from its Microsoft 365 suite reflects the company’s willingness to address antitrust concerns raised by the EU. By offering packages without Teams, Microsoft aims to provide customers with more choice and flexibility while ensuring fair competition in the market. The company’s commitment to improving interoperability and accessibility of Office web applications within competing services showcases its dedication to creating an environment that fosters innovation and meets the needs of European business customers.
Microsoft’s move to unbundle Teams from its Microsoft 365 suite marks a significant development in response to EU antitrust concerns. As the investigation unfolds, it remains to be seen how these changes will impact the competitive landscape and whether they will satisfy the EU’s requirements. Nonetheless, Microsoft’s commitment to addressing the concerns raised demonstrates its ongoing efforts to navigate regulatory challenges and maintain a fair and competitive marketplace for its customers.
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