The European Union has concluded a significant antitrust inquiry into Microsoft’s business practices, accepting a series of binding commitments from the tech giant regarding the bundling of its Teams workplace communication platform with its popular productivity suites. Announced on Friday, this decision marks a critical development in global efforts to foster fair competition within the digital economy, potentially reshaping how dominant software providers package and distribute their core offerings.
The EU’s investigation, initiated in July 2023 following a complaint by Salesforce-owned Slack, alleged Microsoft abused its dominant market position. Regulators contended that bundling Teams with its Office 365 and Microsoft 365 software suites unfairly stifled competition, hindering rival collaboration tools from gaining market share. Slack, acquired by Salesforce for $27.7 billion in 2021, directly competes with Teams.
To resolve competition concerns and avert an antitrust fine, Microsoft agreed to commitments binding for at least seven years. These include offering Office 365 and Microsoft 365 suites at a reduced price without Teams. Additionally, customers with existing long-term licenses gain flexibility to switch to Teams-free alternatives.
Beyond pricing adjustments, Microsoft pledged to enhance interoperability between its products and competing communication tools, facilitating data migration from Teams to rival platforms—crucial for businesses seeking flexibility. Further commitments included increasing the price differential by 50% between suites with and without Teams, and ensuring clear display of Teams-free offers on its advertising channels.
Teresa Ribera, executive vice-president for clean, just and competitive transition at the European Commission, emphasized the decision’s intent: “With today’s decision, we make binding for seven years or more Microsoft’s commitments to put an end to its tying practices that may be preventing rivals from effectively competing with Teams.” For Microsoft, Nanna-Louise Linde, vice president of European government affairs, stated, “We appreciate the dialogue with the Commission that led to this agreement, and we turn now to implementing these new obligations promptly and fully.” This outcome underscores the EU’s proactive stance on digital market competition, signaling continued scrutiny for tech giants and their ecosystem strategies.
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