Microsoft, EC reach deal on Teams app bundling

The European Commission has concluded its lengthy investigation into Microsoft’s bundling of Teams into sales of its productivity software suites. 

Microsoft offered commitments to address competition concerns going forward, pre-empting a fine from the regulator. The deal requires the company to sell Microsoft 365 (M365) and Office 365 (O365) at a reduced price without Teams and bolster interoperability with rival apps. 

The antitrust probe began when rival collaboration software vendor Slack, now owned by Salesforce, filed a complaint with the European Union regulator in 2020. Slack alleged that Microsoft’s inclusion of Teams with Office 365 and Microsoft 365 amounted to an abuse of its dominant market position. A second investigation was launched in 2024 after a complaint by German videoconferencing software vendor alfaview.

Both complaints have now been resolved, the Commission said in a statement on Friday. “The European Commission has accepted commitments from Microsoft to address EU competition concerns relating to its popular team collaboration platform Teams. These commitments will henceforth be legally binding under EU antitrust rules.”

As part of the deal, the company agreed to:

Make M365 and O365 available to customers without Teams at an “appreciably lower” price, compared to versions that have the app included.

Allow customers with long-term licenses for its productivity suites to switch to subscriptions without Teams.

Enable interoperability of features between Teams and rival collaboration and productivity tools. Rivals should also be able to embed Microsoft Office apps, such as Word and Excel, into their apps. 

Allow customers to move their data out of Teams and onto rival apps. 

“By helping to restore fair competition, these commitments will open up the market for other providers of communication and collaboration tools in Europe,” Microsoft said.

Niko Fostiropoulos, founder and CEO of alfaview, welcomed the agreement. “This decision will strengthen Europe’s digital competitiveness,” he said in a statement. “At the same time, it sends an important signal for Europe’s digital sovereignty: fair market conditions not only promote technological diversity, but also secure the long-term innovative strength of the European market.”

The Commission’s announcement ends a formal investigation that began in 2023. In its preliminary findings, the regulator determined that Microsoft had abused its dominant market position by bundling Teams with its popular productivity suites, after the launch of the collaboration app in 2017. It was widely seen as a competitor to Slack, which saw  rapid success a decade ago as a workplace communication tool. 

The bundling of Teams at no extra cost resulted in and advantage for Microsoft over Slack and others, the Commission alleged.

Following the start of the investigation, Microsoft changed how Teams was sold in 2023. This included unbundling Teams from its product suites in Europe — and later, globally — and lowering the cost of non-Teams subscriptions.

The Commission wasn’t satisfied, hwoever, and, following a consultation with rivals this year, demanded Microsoft take additional steps such as increasing the price difference between suites that contained Teams and those that did not and improving the visibility of interoperability information on its website. 

The agreement with Microsoft is legally binding, the Commission said, with the company’s commitments to remain in force for seven years. The commitment on interoperability will remain in effect for 10 years.