Microsoft is unbundling Teams from Office in Europe to address regulator concerns

Microsoft will start unbundling Teams from its Microsoft 365 and Office 365 productivity suites in EU markets in October. The move is designed to avoid further antitrust scrutiny, after the European Commission opened a formal antitrust investigation into Microsoft’s bundling of its Teams software with the Office productivity suite last month.

“Today we are announcing proactive changes that we hope will start to address these concerns in a meaningful way, even while the European Commission’s investigation continues and we cooperate with it,” says Nanna-Louise Linde, VP of Microsoft european government affairs. “These changes will impact our Microsoft 365 and Office 365 suites for business customers in the European Economic Area and Switzerland.”

The unbundling means that enterprise customers in EU markets will be able to purchase Microsoft 365 subscriptions at a lower monthly price without Teams, or have to buy a standalone version of Teams at a list price of €5 per month or €60 per year. “We will instead simply sell these offerings without Teams at a lower price (€2 less per month or €24 per year),” explains Linde.

The new bundles and pricing will only affect new subscribers, as existing enterprise users can continue to renew their suites and add or remove seats at renewal, or even switch to these new “without Teams” plans. The unbundling is largely targeted at enterprises, as Microsoft will keep bundling Teams in its Microsoft 365 Business plans that are offered to small businesses. Microsoft will also offer a no Teams option, priced at €1 less per month for the Business Basic plan or €2 less per month for Business Standard or Premium plans.

Alongside the Teams unbundling, Microsoft is also planning to improve its documentation on interoperability with Microsoft 365 and Office 365 for rivals like Zoom and Slack to integrate into Exchange, Outlook, and Teams. Microsoft will also allow rivals to host Office web applications within their competing apps, just like how Microsoft does in Teams.

Slack originally filed an anti-competitive complaint against Microsoft with the European Commission in July 2020, just months after a global pandemic began and Microsoft saw massive growth for its Teams product. Slack alleged that Microsoft had “illegally tied” its Microsoft Teams product to Office and is “force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers.”

Microsoft will now have to wait on EU regulators to decide whether its unbundling of Teams from Office suites in EU markets is enough. “We believe these changes balance the interests of our competitors with those of European business customers, providing them with access to the best possible solutions at competitive prices,” says Linde. “We also recognize that we are still in the early stages of the European Commission’s formal investigation. We will continue to engage with the Commission, listen to concerns in the marketplace, and remain open to exploring pragmatic solutions that benefit both customers and developers in Europe.”