Microsoft Unbundles Teams and Office Apps: A Move Driven by Antitrust Concerns

Microsoft will offer its chat and video software Teams independently from its Office product internationally, the US tech giant announced on Monday, six months after unbundling the two products in Europe to avoid potential EU antitrust penalties.

The European Commission has been looking into Microsoft's integration of Office and Teams since a 2020 complaint from the Salesforce-owned competitive workplace messaging tool Slack. Teams launched Office 365 for free in 2017, eventually supplanted Skype for Business and gained popularity throughout the epidemic, partly thanks to its video conferencing.

Microsoft included Teams with Office subscriptions

Previously, Microsoft included Teams with Office subscriptions, thus compelling consumers to utilise Teams if they wanted access to the whole Office suite. This strategy highlighted issues regarding user choice, since organisations and people may prefer alternative communication platforms such as Slack or Zoom yet feel compelled to use Teams owing to bundling.

The European Commission initiated an inquiry into these activities, and Microsoft faced the possibility of significant fines if found guilty of anti-competitive behaviour. Unbundling Teams and Office seems like Microsoft's attempt to address these issues and maybe avoid fines.

Rivals, meanwhile, claim that putting the goods together offers Microsoft an unfair edge. The corporation began selling the two goods separately in the EU and Switzerland on 31 August last year. Microsoft announced a new array of commercial Microsoft 365 and Office 365 suites that do not include Teams in locations outside the European Economic Area (EEA) and Switzerland, as well as a new standalone Teams solution for Enterprise customers in those territories.

Beginning 1 April, clients can renew, update, or switch to the new licensing packages

For new commercial clients, Office without Teams costs $7.75 to $54.75 depending on the package, whereas Teams Standalone costs $5.25. The statistics may differ by nation and currency. The firm did not provide prices for its existing packaged items.

Microsoft's unbundling may not be enough to avoid EU antitrust charges, which are expected to be levied against the business in the coming months as rivals question the costs and the capacity of their messaging services to operate with Office Web Applications in their services, according to sources.

Microsoft, which has received 2.2 billion euros ($2.4 billion) in EU antitrust fines over the last decade for tying or bundling two or more products together, faces a fine of up to 10% of its global annual revenue if found guilty of antitrust violations.

Is This a Global Change?

Microsoft has announced this unbundling for sales within Europe, where the antitrust investigation is focused. However, it's possible this practice could be implemented globally. The long-term implications of this decision are still unfolding. Industry analysts are watching closely to see if Microsoft further unbundles its Office suite, offering individual apps like Word or Excel as separate purchases. User response and continued regulatory pressure might also influence Microsoft's future product offerings.