competition law

The European Commission has closed its antitrust case over Microsoft’s bundling of Teams with Office 365 and Microsoft 365, accepting a package of commitments that avert a fine and will apply for up to a decade.

The decision follows complaints led by Slack in 2020 and a formal probe launched in 2023 into whether tying Teams to Microsoft’s productivity suites distorted competition in workplace communications.

Under the commitments, Microsoft will continue to offer versions of Office 365 and Microsoft 365 for business customers without Teams at reduced prices, and will allow customers with long-term licences to switch to these suites. The company has also agreed to improve interoperability for key functions so rival collaboration tools can work more effectively with Microsoft software, and to provide data portability measures that let customers export data out of Teams to competing services. Most commitments run for seven years; those on interoperability and data portability will remain in force for 10 years. A trustee will monitor implementation and mediate disputes.

Pricing is a centrepiece of the settlement. The Commission said Microsoft would widen by around 50 per cent the price gap between certain Microsoft 365 and Office 365 suites that exclude Teams and equivalent suites that include it, with differences ranging from €1 to €8 per user per month. Microsoft’s offer will be implemented globally, and European customers will be able to move Teams messaging data to rival platforms.

Brussels framed the outcome as restoring choice in a market that grew rapidly during the pandemic. EU competition chief Teresa Ribera said the decision “opens up competition in this crucial market” and ensures businesses can choose the collaboration product that best suits their needs. Microsoft said it would implement the obligations “promptly and fully”.

The case began when Slack, now part of Salesforce, alleged in July 2020 that Microsoft “illegally tied” Teams to its productivity suites, force-installing the app for millions of users and making removal difficult. German videoconferencing provider alfaview filed a similar complaint in 2023. After opening a formal investigation that year, the Commission sent charges in June 2024. In response, Microsoft unbundled Teams from Office in the European Economic Area and Switzerland from October 2023 and extended that model worldwide for new enterprise customers on 1 April 2024.

The settlement sets out several practical changes for customers and competitors:

Product choice and switching: Enterprises can purchase Office 365 or Microsoft 365 without Teams at a lower price and, where they hold long-term licences, switch to non-Teams suites.
Interoperability: Microsoft will open up key interfaces so rival chat, meeting and collaboration tools can integrate with Outlook, calendar, identity and other Microsoft products.
Data portability: Organisations will be able to export Teams data to competing services to facilitate migration.
Oversight and duration: Most measures last seven years; interoperability and portability commitments last 10 years and will be overseen by an independent trustee.

Friday’s outcome avoids penalties that in EU competition cases can reach up to 10 per cent of a company’s worldwide turnover. While Microsoft has previously faced EU fines totalling €2.2 billion for other tying and market-behaviour infringements, the company has in recent years adopted a more conciliatory approach to European antitrust enforcement.

The unbundling moves also formalise changes Microsoft began making during the investigation. It first separated Teams from Office in Europe in 2023, then applied the same structure globally in April 2024—selling Teams as a standalone product and offering core suites without Teams—steps that the Commission had earlier deemed insufficient but which are now part of a broader, binding remedy package.

The Commission and Microsoft both present the agreement as a means to widen competition in software used daily by businesses. For buyers, the immediate effects are expanded licensing options, clearer price differentials between bundles with and without Teams, and formal migration paths should they choose alternative collaboration tools. For rivals, the obligations on interoperability and data portability set out a rules-based framework for connecting to Microsoft products over the next decade.

Slack’s complaint and the subsequent investigation ensured formal scrutiny of bundling practices that became prominent during the pandemic, when videoconferencing and chat tools surged in use. The case now concludes without a fine but with legally binding commitments whose compliance will be observed over several years.