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Microsoft to globally split Teams and Office in response to antitrust scrutiny

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Microsoft to globally split Teams and Office in response to antitrust scrutiny

Microsoft announced on Monday that it will be selling its chat and video app, Teams, separately from its Office product on a global scale. This decision comes six months after the company unbundled the two products in Europe, aiming to avoid a potential EU antitrust penalty. The European Commission has been probing Microsoft’s bundling of Office and Teams since 2020, following a complaint by Slack, a competing workspace messaging app owned by Salesforce.

Teams was introduced to Office 365 for free in 2017 and later replaced Skype for Business. Its popularity surged during the pandemic, largely because of its video conferencing capabilities. However, competitors argue that bundling the products provides Microsoft with an unjust competitive edge. As a response to this, Microsoft began offering the two products separately in the EU and Switzerland starting from August 31st of last year.

“To provide clear options for our customers, we are expanding the measures we implemented last year to separate Teams from M365 and O365 in the European Economic Area and Switzerland to a global scale,” stated a Microsoft spokesperson. “This move also responds to the feedback from the European Commission, offering multinational companies greater flexibility in standardizing their purchasing across different regions.”

In a blog post, Microsoft announced the introduction of a new range of commercial Microsoft 365 and Office 365 suites that exclude Teams for regions outside of the European Economic Area (EEA) and Switzerland. Additionally, a new standalone Teams offering for Enterprise customers in these regions will be available. Beginning April 1, customers have the option to maintain their existing licensing agreement, renew, update, or transition to the new offerings.

For new commercial customers, the prices for Office packages without Teams will range from $7.75 to $54.75, depending on the specific product, whereas the standalone Teams will be priced at $5.25. These prices may vary depending on the country and currency. Microsoft has not revealed the pricing details for the existing bundled products.

Despite Microsoft’s unbundling efforts, it may not be adequate to prevent EU antitrust charges, according to sources. Rivals have criticized both the fees and the compatibility of their messaging services with Office Web Applications in their own offerings. Microsoft, having faced 2.2 billion euros ($2.4 billion) in EU antitrust fines over the past decade for bundling products, faces the risk of fines amounting to as much as 10% of its global annual turnover if found guilty of antitrust violations.

About Rajesh Parmar

Rajesh Parmar

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