Microsoft Halts Mandatory Teams and Office Bundle to Dodge EU Antitrust Investigation

Microsoft Halts Mandatory Teams and Office Bundle to Dodge EU Antitrust Investigation

Table of Content

In this article, we’ll look at the reasons behind Microsoft’s decision to stop bundling its Teams video conferencing and messaging app with the popular Office software, and how this move is intended to avoid a formal EU antitrust investigation sparked by a complaint from rival Slack.

Key Takeaways:

  • Microsoft’s move is aimed at preventing an antitrust probe by EU regulators.
  • The decision comes after a 2020 complaint from Slack, which claimed Microsoft’s practice of bundling Teams and Office was anti-competitive.
  • In the future, companies can purchase Office with or without Teams, but the exact mechanism remains unclear.
  • Negotiations between Microsoft and the European Commission are ongoing, and it’s not guaranteed that an agreement will be reached.
  • This would be Microsoft’s first antitrust probe in over a decade.

Microsoft’s Attempt to Prevent an Antitrust Probe

To prevent an official antitrust investigation by EU regulators, Microsoft has agreed to no longer force customers of its widely used Office software to also have the Teams video conferencing and messaging app installed automatically on their devices. 

Two individuals with direct knowledge of the decision have confirmed this move.

The big technology company is trying to prevent its first antitrust investigation in over a decade by avoiding legal disputes with the European Commission, which have caused harm before.

Slack’s Complaint and the Push for Unbundling

This latest development comes on the heels of a 2020 complaint by Slack, a rival messaging and collaboration platform. 

Slack claimed that Microsoft’s practice of bundling the two services together was anti-competitive, prompting a call for intervention from EU officials.

Slack, a company now owned by Salesforce, has requested European Union (EU) authorities to demand that Microsoft sell Teams as a standalone product, separate from their Office software. 

The General Counsel at Slack, David Schellhase, expressed that they want the EU to act as an impartial judge, investigate the situation thoroughly, and uphold the law.

The Uncertain Future of Office and Teams Bundling

While the agreement to stop bundling Teams with Office has been reached, the exact mechanism on how companies can purchase Office with or without Teams remains unclear. 

The individuals familiar with the matter have stressed that talks between Microsoft and the European Commission are ongoing, and a final deal is not guaranteed.

The move comes at a time when apps like Teams and Slack have seen a surge in usage due to the increasing adoption of remote work tools during the coronavirus pandemic. 

This situation has created a multibillion-dollar opportunity in the market.

Ongoing Talks with the European Commission

Even though Microsoft has not reached a final agreement, it acknowledges its duties as a significant tech firm in the European Union (EU). 

Microsoft assures that it is working together with the commission to resolve any issues and welcomes workable solutions that benefit both the customers and the company. 

However, the European Commission, the administrative division of the EU, has not given any feedback on this subject yet.

Microsoft’s Troubled Antitrust History

Microsoft has faced challenges regarding antitrust investigations before. 

Specifically, in 2008, the European Commission accused the company of using its powerful position to encourage people to use its Internet Explorer browser by including it with Windows and ignoring other competitors.

The company eventually settled with the commission and offered users a choice of browsers. However, in 2013, the EU fined Microsoft €561 million for failing to honor the promise.

It’s still unclear if the technology company’s present proposal for Teams will satisfy the worries of the regulators. Should the European Commission accept Microsoft’s offer, it would signal a major shift in the tech giant’s approach to product bundling.

Conclusion

Microsoft’s decision to stop bundling Teams with Office is a strategic move aimed at addressing EU regulators’ concerns and avoiding an antitrust investigation. 

While the details of the unbundling process are yet to be determined, this development underscores the growing scrutiny on tech giants and their competitive practices in the digital market. 

As the talks between Microsoft and the European Commission continue, the outcome of this case could set a precedent for future antitrust investigations involving other major technology companies.

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Written by

Alexander Sterling

Alexander Sterling

Alexander Sterling is a renowned financial writer with over 10 years in the finance sector. With a strong economics background, he simplifies complex financial topics for a wide audience. Alexander contributes to top financial platforms and is working on his first book to promote financial independence.

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Judith

Judith

Judith Harvey is a seasoned finance editor with over two decades of experience in the financial journalism industry. Her analytical skills and keen insight into market trends quickly made her a sought-after expert in financial reporting.