Microsoft is set to launch a revamped version of its Microsoft 365 and Office 365 subscription service, minus Teams, as part of a response to concerns raised by the European Union regulator and competitors like Slack.
This decision comes after Microsoft agreed to sell Office 365 without Teams in the EU and Switzerland in the previous year. Teams was initially bundled with the Office 365 suite back in 2017.
Critics argued that Microsoft’s bundling of the two services has given it an unfair advantage, prompting this move to unbundle them.
Slack, owned by Salesforce, termed the move “illegal” alleging that Microsoft forced installation of Teams to customers through its market-dominant productivity suite and hid the true cost of the chat and video service.
Teams was integrated into Office 365 at no extra cost in 2017, supplanting Skype for Business. Its popularity surged during the pandemic, especially for video conferencing.
Competitors argue that bundling these products gives Microsoft an edge. To address concerns, Microsoft began offering them separately in the EU and Switzerland as of August 31 last year.
“To ensure clarity for our customers, we are extending the steps we took last year to unbundle Teams from M365 and O365 in the European Economic Area and Switzerland to customers globally,” a Microsoft spokesperson said.
“Doing so also addresses feedback from the European Commission by providing multinational companies more flexibility when they want to standardize their purchasing across geographies.”
Microsoft said in a blog post that it was introducing a new lineup of commercial Microsoft 365 and Office 365 suites that do not include Teams in regions outside the EEA (European Economic Area) and Switzerland, and also a new standalone Teams offering for Enterprise customers in those regions.
Starting April 1, customers have the option to stick with their current licensing arrangement, renew, update, or transition to the new offerings.
For fresh commercial clients, the prices for Office excluding Teams range from $7.75 to $54.75, depending on the specific product. Meanwhile, opting for Teams Standalone will cost $5.25. These prices are subject to variation based on country and currency. However, Microsoft has not revealed the pricing for existing bundled products.
Potential Antitrust Fine To Hit Microsoft
Despite Microsoft’s move to unbundle its services, it might not be sufficient to ward off potential EU antitrust charges. Sources indicate that criticism from rivals regarding the fee levels and the compatibility of their messaging services with Office Web Applications in their platforms could lead to antitrust actions against the company.
Microsoft, which has racked up 2.2 billion euros ($2.4 billion) in EU antitrust fines in the past decade for bundling two or more products together, risks a fine of as much as 10% of its global annual turnover if found guilty of antitrust breaches.
Microsoft is not the only tech giant that faced EU antitrust fines.
The European Union imposed its largest fine of 4.3 billion euros on Google for exploiting the dominant position of its Android mobile operating system to favor Google’s search engine.
However, a court later reduced the fine to 4.125 billion euros after reviewing the duration of the infringement. Google is currently appealing this fine in the EU’s highest court.
Additionally, the EU Commission slapped Google with a fine of 2.4 billion euros for granting an illegal advantage to its Google Shopping service in search results, making it the world’s most popular search engine.
Google again contested this fine, but in January of this year, the European Court of Justice’s top adviser recommended upholding the fine. While these recommendations aren’t binding, they often influence the rulings of EU judges.
Furthermore, the EU Commission fined the iPhone maker, Apple, 1.8 billion euros for restricting European users from accessing cheaper alternative payment options for music streaming services, affecting millions of people.
