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Microsoft avoids EU antitrust fine with Teams price split

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Microsoft sidestepped a potential multibillion-euro EU antitrust fine by agreeing to lower prices on Office products that exclude its Teams app, the European Commission announced Friday. The deal follows a long-running probe triggered by a 2020 complaint from Slack, later joined by German rival Alfaview, accusing Microsoft of unfairly bundling Teams with Office.

Under the agreement, Microsoft will widen the price difference by 50% between Office/Microsoft 365 packages sold with and without Teams, creating a gap of €1–€8 depending on the suite. This pricing model will stay in place for seven years, while additional commitments on interoperability and data portability—including the ability for customers to export Teams messaging data to competitors—will last 10 years.

EU antitrust chief Teresa Ribera said the move would “open up competition in this crucial market,” ensuring companies can freely choose their collaboration tools. The decision arrives a week after Ribera fined Google €2.95 billion for adtech violations, a ruling that drew sharp criticism from U.S. President Donald Trump.

Microsoft Vice President Nanna-Louise Linde said the company welcomed the constructive dialogue and would implement its obligations globally. Alfaview CEO Niko Fostiropoulos praised the settlement as a win for Europe’s “digital sovereignty,” while Salesforce president Sabastian Niles called it “a meaningful step forward” and urged strict enforcement.

Microsoft has previously racked up €2.2 billion in EU fines for bundling and other practices, but in recent years it has sought a more cooperative stance with regulators. Antitrust penalties can reach up to 10% of a firm’s global annual turnover, meaning the company could have faced a fine of over $20 billion without the deal.

Microsoft’s Office-Teams Unbundling May Help Avoid EU Antitrust Fine

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Microsoft appears poised to avert a significant EU antitrust penalty as regulators are likely to accept its latest concessions regarding the bundling of Office and Teams, according to three sources familiar with the situation. This development follows sustained pressure from European competitors and comes amid growing transatlantic tensions over the EU’s scrutiny of American tech giants.

The case dates back to a 2020 complaint from Slack, owned by Salesforce, which accused Microsoft of gaining an unfair competitive edge by bundling its Teams app with its dominant Office productivity suite. German rival alfaview filed a similar complaint in 2023, intensifying the European Commission’s investigation.

In response, Microsoft unbundled Teams from Office in 2023, initially offering a 2-euro price reduction for Office without Teams and setting a 5-euro monthly price for Teams as a standalone product. After criticism from rivals that this pricing strategy was inadequate, Microsoft adjusted the terms again in February 2024 to widen the price gap and address antitrust concerns.

Sources indicate that Microsoft’s latest proposal also includes enhanced interoperability to allow rival platforms to better integrate with Microsoft’s ecosystem — a key demand from competitors seeking a level playing field.

The European Commission is expected to launch a market test in the coming months to gather feedback from industry stakeholders before issuing a final decision. While outcomes may still shift depending on this feedback, the current offer appears likely to satisfy EU regulators.

Despite having already paid over €2.2 billion in fines for bundling practices and other competition violations in the past, Microsoft has not commented publicly on the current negotiations.

This case unfolds against a backdrop of geopolitical friction, as former U.S. President Donald Trump has threatened retaliatory tariffs on countries that impose penalties on American tech firms, adding a layer of diplomatic complexity to the EU’s enforcement actions.

Microsoft Adjusts Office-Teams Pricing to Avoid EU Antitrust Fine

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Microsoft is making changes to the pricing structure of its Office product bundled with Teams, aiming to avoid a potential EU antitrust fine, according to sources familiar with the matter. This adjustment comes in response to complaints from competitors, including Salesforce-owned Slack and German rival alfaview, who raised concerns about Microsoft’s practice of bundling its chat and video app, Teams, with Office.

Teams, added to Office 365 in 2017, became particularly popular during the pandemic as a video conferencing tool, replacing Skype for Business. Microsoft’s new pricing strategy, introduced in 2023, unbundles Teams from Office, offering Office without Teams at a lower price (2 euros cheaper) and selling Teams as a standalone service for 5 euros per month. The aim is to create more competitive pricing, enabling rivals to offer their products at more attractive rates.

The European Commission has been seeking feedback from industry stakeholders, with a deadline for responses this week, before deciding whether to launch a formal market test. Microsoft has also reportedly proposed improved interoperability terms to help competitors in the space.

Both the EU competition authority and Microsoft declined to comment. The Commission’s investigation could lead to a fine of up to 10% of Microsoft’s global annual revenue, which could be significant, considering the company’s history with EU antitrust cases, including a 2.2 billion euro fine in the early 2000s for bundling products. If the EU accepts Microsoft’s offer, it could clear the path for other investigations, such as those involving Apple and Google.