Microsoft fianlly ends EU worries over Teams competition with new pricing shakeup for 365 suites

• Slack’s complaint about the bundling of Teams software, since 2019, has finally been settled
• Microsoft must increase the pricing gap, make pricing clearer and allow customers to downgrade
• Interoperability with other M365 software and options to migrate to alternatives also covered

The European Commission has accepted Microsoft’s efforts to address competition concerns over Teams, stemming from a Slack complaint regarding Microsoft’s bundling of Teams into its SaaS packaged from 2019.

Antitrust regulators found that Microsoft held a dominant position as a result of tying Teams to Office 365/Microsoft 365 suites, giving it an advantage over rivals, but the company has been working closely with the Commission for a number of years to rectify this position.

Microsoft and the European Commission have now agreed on legally binding terms to settle the complaint once and for all, and it means subscriptions should offer even more value to European customers.

Teams/EU debate finally reaches legally binding settlement

Microsoft’s previous efforts to sell some suites without Teams, though acknowledged, ultimately ended up being insufficient.

Now, Microsoft has agreed to sell Office 365/Microsoft 365 without Teams at a reduced price, increasing the existing price difference between bundles with and without Teams by a further 50%. Parallel offers are also to be displayed clearly on Microsoft’s websites.

Customers with long-term licenses must also be given permission to switch to Teams-less licenses if they wish.

From a technical standpoint, Microsoft will ensure interoperability for Teams’ rivals with its office software, including Word and Excel. It will also enable them to embed Office Web Apps into their own tools, much like Teams already offers today.

Companies now looking to change platform should have access to data portability tools for easier exporting.

“Today’s decision therefore opens up competition in this crucial market, and ensures that businesses can freely choose the communication and collaboration product that best suits their needs,” Clean, Just and Competitive Transition EVP Teresa Ribera commented.

Microsoft VP for European Government Affairs Nanna-Louise Linde added: "We appreciate the dialogue with the Commission that led to this agreement, and we turn now to implementing these new obligations promptly and fully.”

European regulators’ efforts are far-reaching, and we can largely thank Slack for its initial complaint, because the changes won’t just affect European customers. Microsoft must apply these commitments worldwide, which are to be in force for seven years. Interoperability and portability commitments will last a total of 10 years.

Failure to comply will land Microsoft in a lot of trouble – up to 10% of its global turnover in fines or daily penalty payments.

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