Microsoft avoids fine by unbundling Teams from its software packages
- The European Commission ruled that Microsoft abused its dominant market position by bundling Teams with its Office software.
- As a resolution, Microsoft will sell Office 365 and Microsoft 365 without Teams at lower prices for the next seven years.
- This decision aims to enhance competition and give customers more options in the collaboration market.
In September 2025, the European Union concluded a long-standing investigation into Microsoft's practices regarding its communication tool, Teams. The inquiry was driven by complaints from rival companies like Slack, which argued that Microsoft had been unfairly leveraging its dominant position by bundling Teams with its widely used Office software packages, thereby disadvantaging competitors. The European Commission found that this approach constituted a violation of competitive practices, allowing Microsoft to gain an unwarranted edge in the market. In response to the allegations and subsequent investigation, Microsoft agreed to significant changes involving the sale of its Office 365 and Microsoft 365 packages. They committed to offering these software suites without Teams, ensuring that the options would be available at a clearly lower price compared to the combined packages. Additionally, the company pledged to provide customers with options for switching to these revised packages without facing penalties or added discounts on versions that included Teams. As part of the resolution, Microsoft also agreed to enhance interoperability between Teams and other competitors’ products. These changes are legally binding and will remain in force for up to ten years, effectively restructuring their market strategy in order to comply with EU regulations and avoid hefty fines. The company expressed appreciation for the constructive dialogue with EU regulators, indicating their commitment to adhere closely to the outlined obligations. This decision marks a significant turning point in the software industry, especially in the realm of office collaboration tools, as it opens the market to greater competition. EU regulators, including Teresa Ribera, emphasized that this ruling would benefit companies and ensure free choice in selecting communication and collaboration tools that best meet their needs. This regulatory action is part of a broader trend of increasing scrutiny on tech giants and their business practices in various global markets.