Tech giant proposes concessions after long-running regulatory scrutiny and Slack complaint
Microsoft has formally proposed to unbundle its Teams workplace messaging app from its popular Office 365 and Microsoft 365 software suites in a bid to settle a major European Union antitrust investigation and avert a potential multi-billion-dollar fine.
The offer, announced Friday, comes after years of scrutiny from the European Commission—the EU’s executive arm—over allegations that Microsoft unfairly tied Teams to its dominant productivity tools, including Word, Excel, Outlook, and PowerPoint. Slack, now owned by Salesforce, lodged the original complaint in 2020, claiming the bundling gave Microsoft an anti-competitive advantage in the corporate communications market.
Proposed concessions
In a statement, the Commission said Microsoft has committed to several key measures:
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Unbundling Teams: Microsoft will offer versions of Office 365 and Microsoft 365 without Teams at a reduced price, including under existing contracts.
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Improved interoperability: Competitors will gain greater technical access to Microsoft products, including the ability to embed Office web apps (like Word and Excel) into their own platforms.
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Data portability: Customers will be allowed to extract their Teams data and migrate it to rival services.
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Duration: Pricing changes would last seven years; interoperability commitments would extend for a decade.
Microsoft’s vice president for European government affairs, Nanna-Louise Linde, described the proposal as the result of “constructive, good-faith discussions” with the Commission. “We believe this resolution addresses the European Commission’s concerns while preserving our ability to meet customers’ needs,” she said.
The offer is currently under market testing, with the EU seeking feedback from Microsoft’s rivals and customers before deciding whether to accept the concessions.
Regulatory context and market implications
Microsoft’s move reflects growing regulatory pressure on US tech giants in Europe. In the past two decades, the Commission has imposed heavy fines on Microsoft—including €497 million in 2004 and €899 million in 2008—for competition violations. Apple, Google, and Intel have also faced multi-billion-euro penalties under EU antitrust law.
If the Commission finds Microsoft in breach again, it could impose a fine of up to 10% of the company’s global turnover.
The company has already begun offering unbundled options for Microsoft 365 outside the EU and hinted it may harmonise the new structure globally if the proposal is accepted. That could mark a pivotal shift in Microsoft’s enterprise sales model.
Competitor reaction
Salesforce’s chief legal officer, Sabastian Niles, welcomed the Commission’s announcement but called for enforceable remedies. “Microsoft’s anticompetitive practices with Teams have harmed competition,” he said. “We will carefully scrutinize Microsoft’s proposed commitments.”
Slack, which filed the original complaint before its acquisition, has not publicly commented since the announcement, but the outcome could benefit other collaboration tools aiming to challenge Teams’ dominance in the hybrid work era.
A benchmark case for tech regulation
The EU’s decision on Microsoft’s offer will set an important precedent for how regulators tackle software bundling in the cloud era. It may also influence similar inquiries elsewhere, including in the US, where Microsoft has largely avoided the kind of antitrust headwinds it faces in Europe.
For now, Microsoft is positioning itself as cooperative rather than combative. “This is about customer choice,” said Linde. Whether that message convinces Brussels—and Microsoft’s rivals—remains to be seen.
