Microsoft is unbundling Teams from its Office/Microsoft 365 suites—originally implemented in Europe to address competition concerns and now expanded globally. This move aims to appease regulators and offer clearer choices to enterprise customers.
What’s Changing?
- Initial rollout: Starting October 1, 2023 in the European Economic Area (EEA) and Switzerland, Microsoft began offering Office without Teams at a discounted price—typically €2 less per month or €24 less per year—with Teams available separately at €5/month.
- Global expansion: As of April 1, 2024, these options were extended globally. New enterprise customers can now choose Office/M365 suites without Teams and purchase Teams separately.
- EU’s response: The European Commission has indicated that the unbundling alone has not fully alleviated antitrust concerns, demanding further actions such as improved interoperability and data portability.
Why It Matters
| Aspect | Significance |
|---|---|
| Competition | Unbundling enables rivals to compete fairly, addressing complaints by Slack. |
| Customer Flexibility | Enterprises can now choose whether to include Teams, making subscriptions more tailored. |
| Regulatory Compliance | This is part of Microsoft’s broader strategy to resolve EU antitrust issues and avert potential fines. |
Industry Reactions & Regulatory Outlook
- EU Accusation: In June 2024, the European Commission formally accused Microsoft of “possibly abusive” bundling of Teams with Office, citing it as anti-competitive behavior that stifled market rivals.
- Proposed Remedies: Microsoft’s latest proposal includes unbundling Office from Teams, enabling customers to switch between plans, promoting interoperability with rival apps, and allowing data portability. These commitments may become legally binding if the EU approves.
- Company Statement: Microsoft has committed to comply with EU rules, acknowledging the importance of regulatory harmony—a stance reinforced by senior leadership.Reuters
