Microsoft has proposed adjusting the price difference between its Office product with Teams and the version sold without the chat and video app. This move aims to prevent a potential antitrust fine from the European Union, according to three sources familiar with the matter.
This step comes after years of complaints from rivals. Salesforce-owned Slack first raised concerns in 2018, accusing Microsoft of unfairly bundling Teams with Office. In 2023, German competitor alfaview filed a similar complaint with the European Commission.
Teams was added to Office 365 for free in 2017, replacing Skype for Business. The app saw rapid growth during the COVID-19 pandemic, largely due to its video conferencing features. To address competition concerns, Microsoft’s recent pricing adjustments involve making the version of Office with Teams more expensive. This change is meant to help rival products compete on price, potentially encouraging users to switch.
In 2023, Microsoft unbundled Teams from Office, offering the software without the app at 2 euros less than the version with Teams. The standalone Teams app is priced at 5 euros per month.
The European Commission has sought feedback from companies about the proposed changes, with a deadline this week. Microsoft has also offered better terms for interoperability, allowing competitors to integrate more easily with its software.
The Commission, along with Microsoft, declined to comment on the matter. The EU has previously fined Microsoft 2.2 billion euros ($2.3 billion) for similar issues. EU antitrust penalties can be as high as 10% of a company’s global annual revenue.
If Microsoft’s proposal is accepted without a fine, it could free up the Commission’s resources to focus on its ongoing investigations into other tech giants like Apple and Google, according to one of the sources.
Read more: