EU Antitrust Dispute Over Bundling

For more than five years, the European Union has investigated Microsoft’s practice of bundling its Teams communication platform with Office 365 and Microsoft 365 subscriptions. The complaint, originally filed by Slack, alleged that Microsoft was abusing its market dominance by forcing customers to purchase Teams alongside the Office productivity suite, an action described as an illegal and anti‑competitive tying of products.

Agreement to Unbundle and Reduce Prices

In response, Microsoft has agreed to offer Office 365 suites without Teams at a significantly lower price than the bundled versions. The price reduction is expected to cut the difference between the two options by roughly 50 percent. Customers with long‑term licenses will be able to switch to licenses that do not include Teams, and they will have the right to move their data out of Teams if they choose a different communications platform.

Benefits for Customers and Competitors

The unbundling move gives businesses greater choice and flexibility. It also opens the door for Teams competitors—such as Slack, Google Meet, and Zoom—to interoperate more easily with core Office applications like Word and Excel. Industry observers note that while the price cut may not dramatically shift market share, it does create a more level playing field for rival collaboration tools.

Market Impact and Outlook

Microsoft’s agreement is designed to keep the company out of trouble with EU regulators for at least seven years, avoiding a potential fine. Analysts point out that Teams already enjoys a user base five times larger than Slack’s and generates about $8 billion in revenue, roughly double Slack’s projected earnings. Nonetheless, the settlement is seen as a clear signal that the EU is willing to enforce competition rules in the software market.

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