Microsoft has avoided a massive European Commission (EC) fine by agreeing to reduce the price of its Office suite of products and unbundle its Microsoft Teams chat and video tool from its other applications.
The EC said it had accepted commitments from the technology giant to unbundle Teams from apps including Word, Excel, PowerPoint and Outlook, which are part of its Office 365 and Microsoft 365 suites for business customers.
Microsoft will:
- Reduce the price of suites without Teams
- allow customers with long-term licenses to switch to suites without Teams
- provide interoperability for key functionalities between communication and collaboration tools that compete with Teams and some Microsoft products, and
- allow customers to move data out of Teams for use of competing solutions.
“By helping to restore fair competition, these commitments will open up the market for other providers of communication and collaboration tools in Europe,” the EC said in a press release.
The case was triggered by a 2020 complaint from Salesforce-owned Slack Technologies Inc., which accused Microsoft of bundling Teams with its Office product to gain an unfair advantage over rivals.
The decision means Microsoft will not be hit with a fine, which under European law could have been of up to 10% of its annual worldwide turnover, or about US$24.5 billion (A$36.9 billion).
The EC had earlier made preliminary findings that Microsoft breached EU law because the bundling of Teams with its other productivity apps gave it an undue competitive advantage in the market for cloud-based communication and collaboration products.
Microsoft changed the way it distributed Teams after an investigation was launched, but the EC found this did not address its concerns.
Microsoft (NASDAQ: MSFT) shares closed $8.89 (1.77%) higher at $509.90 on Friday (Saturday AEST), capitalising the company at $3.79 trillion.
