Microsoft has avoided a potentially multibillion-dollar penalty after the European Commission accepted its offer to unbundle Teams from its Office 365 and Microsoft 365 productivity suites, ending a long-running antitrust probe.
The Commission said Friday that Microsoft’s commitments to separate Teams from Office will be legally binding for at least seven years, with additional requirements on interoperability and data portability lasting up to a decade. Regulators accused Microsoft last year of abusing its dominant position by tying Teams to its widely used productivity apps, giving the collaboration tool an “undue competitive advantage.”
Under the deal, Microsoft will offer cheaper versions of Office 365 and Microsoft 365 without Teams, and allow existing long-term licence holders to switch to these suites. The company must also enable interoperability between rival chat and collaboration tools and Microsoft products, and allow customers to export data from Teams into competing services.
Microsoft initially floated partial unbundling in 2024, but the Commission pressed for further concessions following complaints from rivals including Salesforce-owned Slack. The company agreed in May to deepen the price gap between bundled and unbundled versions by 50 per cent, ensure its websites advertise both options, and publish information on data portability and interoperability for developers.
The settlement heads off a fine that could have reached up to 10 per cent of Microsoft’s global annual turnover—equivalent to roughly US$24bn based on its 2024 revenue. “We appreciate the dialogue with the Commission that led to this agreement, and we turn now to implementing these new obligations promptly and fully,” said Nanna-Louise Linde, Microsoft’s vice-president of European government affairs.
The case stemmed from a 2020 complaint by Slack, acquired by Salesforce for US$27.7bn the following year. Sabastian Niles, Salesforce’s chief legal officer, said the outcome “sends the message that Microsoft’s tying of Teams with Office harmed businesses, denied customers fair choice, and resulted in many years of lost competition.”
Teresa Ribera, executive vice-president for clean, just and competitive transition at the Commission, said the decision ensures “businesses can freely choose the communication and collaboration product that best suits their needs.”
By closing the probe without resorting to litigation or sanctions, the Commission secures wider competition in the European market for workplace communication software, while Microsoft avoids a protracted battle and a costly fine.
