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EU Regulators Accept Microsoft’s “Teams Unbundling” Deal, Letting It Dodge a Fine

3 Mins ReadUpdated:

Microsoft has reached an agreement with the European Commission to address competition concerns over bundling its Teams collaboration tool with the Office/Microsoft 365 suite, allowing it to avoid a major antitrust penalty. EU regulators, following complaints from Slack (now owned by Salesforce) and German firm alfaview, found that Microsoft’s practice of tying Teams to its productivity apps (Word, Excel, PowerPoint, Outlook) gave Teams an unfair competitive advantage. As remedial commitments, Microsoft will offer versions of Office 365 and Microsoft 365 without Teams at discounted prices, improve interoperability with rival tools, and permit customers to export their Teams data. The Commission accepted these binding commitments, many stretching over seven to ten years, finding them sufficient to forestall a fine.
Sources:
Reuters
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The Verge
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AP News
Key Takeaways
– Microsoft must now offer Microsoft 365/Office 365 plans without Teams at a reduced cost, giving customers more choice.
– The commitments include long-term requirements (7–10 years) for interoperability, data portability, and pricing adjustments to ensure competition isn’t stifled.
– By agreeing to these measures instead of fighting the case, Microsoft avoids a potentially large EU antitrust fine, while the EU saves time and resources yet still achieves regulatory goals.
In-Depth
Europe is stepping up its oversight of Big Tech again, this time by pressing Microsoft to unbundle Teams from its Office/Microsoft 365 productivity suites—an arrangement the European Commission found was giving Microsoft an unfair competitive advantage. This is a significant moment in tech regulation: rather than issue a heavy fine, Brussels accepted a set of binding commitments from Microsoft to change how it sells, integrates, and licenses these tools.
The trouble started with complaints from rivals like Slack and alfaview, who argued Microsoft was improperly tying Teams to Office products in a way that locked customers in and made it hard for competitors to compete. Microsoft had already previously made some changes—such as partially unbundling in Europe—but those measures were judged by regulators as insufficient.
Under the terms of the settlement, Microsoft will now offer versions of its Microsoft 365 and Office 365 packages without Teams at a lower price, globally—not just in the EU. The company will also improve interoperability, allowing competing tools to integrate more effectively, and will permit export of Teams data so companies can more easily switch platforms if they want. The pricing differences will be locked in for a period (seven years for many obligations; some components like data portability and interoperability will last up to ten years).
This outcome gives Microsoft a clear path to avoid a steep penalty, while meeting the EU’s concern that bundling software in this way can suppress competition. For consumers and business users, it means more flexibility, potentially lower costs if they don’t need Teams, and easier choice among collaboration tools. For rivals, it means a fairer shot in the market. From a regulatory standpoint, this settlement underscores the EU’s strategy of enforcement through negotiated commitments—ideally getting compliance without lengthy litigation and hefty fines.
Overall, Microsoft’s agreement illustrates a balance: regulators getting meaningful change, users getting more options, and the company avoiding extreme penalties—so long as the promises hold up. Whether this sets a precedent for future cases will be worth watching.