Official: Microsoft unbundles Teams in Europe

Microsoft has blinked first in its dispute with the EU over bundling Teams with Microsoft 365 and Office 365, and will now allow European customers to buy the two software suites without it. It also pledged to make it easier for rival meeting tools to work with the two suites.

The European Commission announced in July that it was kicking off a formal investigation into whether the bundling of the Teams collaboration tool with Office 365 and Microsoft 365 by the Redmond giant was in breach of EU competition rules.

Microsoft's latest move is to make "proactive changes" it hopes will address the EC's concerns, even as the formal investigation continues. The company said it will continue to cooperate throughout.

In an announcement on its EU Policy blog, Microsoft said that from October 1 it will unbundle Teams from Microsoft 365 and Office 365 for business customers in the European Economic Area (EEA) and Switzerland. The EEA includes EU member states plus those countries in the European Free Trade Association (EFTA) – Iceland, Liechtenstein, and Norway.

Office 365 is a cloud-based suite of apps and services including Word, Excel, Outlook, and PowerPoint, while Microsoft 365 also includes the Windows 10 OS.

The suites will now be sold in special EEA editions for €2 ($2.17) less per month or €24 ($26.07) less per year, while Teams will be available for new enterprise customers to buy separately at a list price of €5 ($5.43) per month or €60 ($65.21) per year.

Existing enterprise customers for Microsoft 365 or Office 365 can elect to stay with their current version of the suite or move to a version without Teams, the company said.

For small businesses and frontline workers, Microsoft will offer versions of the suites both with and without Teams, the latter versions coming at a lower price. Updated pricing details are available on a Microsoft web page.

In addition, the software giant said it will take steps to make it easier for third-party collaboration and meeting tools to integrate with Office 365 and Microsoft 365.

Microsoft already allows companies like Zoom and Salesforce to create tailored and integrated experiences, but said it has received feedback that it could do more in terms of providing support and making development easier.

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However, this chiefly appears to comprise of efforts to make application developers more aware of the existing publicly available application programming interfaces (APIs) and extensibility in Microsoft 365 and Office 365 apps and services that connect with Teams.

Microsoft also pledged develop new ways for other developers to host the Office web applications within their own apps and services, in a similar manner to the way Microsoft handles this in Teams.

The company said that it believes the changes "balance the interests of our competitors with those of European business customers," but will it be enough to convince the European Commission that it is meeting the rules on fair competition in the marketplace?

We asked the commission itself for a reaction, but it appears that it is keeping its cards close to its chest at the moment. A spokesperson told us: "We take note of Microsoft's announcement. We have no further comment to make."

But the Cloud Infrastructure Service Providers in Europe (CISPE) trade group was less reticent.

"This concession by Microsoft shows that, when faced with regulatory pressure, it can be persuaded to do the right thing," Secretary General Francisco Mingorance said in a statement sent to The Register.

CISPE, along with AWS, is already pursuing its own complaint with the EC against Microsoft over anti-competitive licensing policies for running Microsoft software on cloud platforms other than its own Azure cloud.

Mingorance claimed that CISPE's research indicates that Microsoft's cloud licensing can make it as much as 28 percent more costly to operate the company's software on third-party cloud infrastructure compared to Azure.

He said that unbundling Teams is "just the tip of the iceberg" when compared with the many European businesses and public sector organizations facing "Microsoft's exclusionary practices" when moving to the cloud. ®