Microsoft Avoids EU Fine: Teams Unbundling Agreement

Microsoft Avoids EU Antitrust Fine by Unbundling Teams

Microsoft has successfully navigated a significant antitrust investigation by the European Commission, avoiding potentially substantial fines. This outcome was achieved through a commitment to decouple its Teams messaging application from its core productivity suites.

EU Commission Approves Microsoft's Concessions

Following a multi-year investigation initiated in 2020 due to complaints from competitor Slack, the Commission has formally approved Microsoft’s proposed remedies. The investigation centered on concerns regarding the inclusion of Teams with the Office suite at no additional cost.

For the next seven years, Microsoft will offer Microsoft 365 and Office 365 without Teams as a more affordable option. Customers will have the explicit choice to add the collaboration app to their subscriptions for an additional fee.

Enhanced Interoperability and Data Export

The Commission secured an agreement from Microsoft to broaden access to its Application Programming Interfaces (APIs). This will facilitate interoperability between its suite of applications and those offered by third-party messaging and collaboration tool providers.

Furthermore, Microsoft has committed to enabling data portability, allowing users to export their data from Teams for a period of five years.

Concerns Over Competitive Advantage

The European authority initially accused Microsoft of violating competition regulations by bundling Teams with its productivity packages. This practice was deemed to unfairly leverage the company’s dominant market position and provide an undue advantage to Teams.

The Commission’s preliminary findings highlighted that Teams’ integration with other Microsoft 365 applications – including Excel, Outlook, SharePoint, and Word – further amplified this advantage.

Phased Implementation of Unbundling

Microsoft initially attempted to address these concerns with a partial unbundling of Teams in April 2024. However, the Commission determined that more comprehensive changes were necessary.

Subsequently, in May 2025, Microsoft presented a revised plan that ultimately gained the Commission’s approval.

A Mutually Beneficial Resolution

This resolution represents a positive outcome for both the EU and Microsoft, as it circumvented a potentially protracted legal battle. The Commission can demonstrate its ability to secure concessions from major technology companies.

Microsoft is now proactively offering versions of its productivity suites without Teams at a 50% price reduction compared to bundled versions, a change implemented globally.

Avoiding Significant Penalties

By reaching this agreement, Microsoft has avoided potentially severe financial penalties. The Commission has the authority to impose fines of up to 10% of a company’s annual global revenue for breaches of competition rules.

Given Microsoft’s reported revenue of $245 billion last year, such a fine would have amounted to a substantial sum.

Statements from Microsoft and the Commission

“We appreciate the dialogue with the Commission that led to this agreement, and we turn now to implementing these new obligations promptly and fully,” stated Nanna-Louise Linde, Vice President of European Government Affairs at Microsoft.

Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition at the European Commission, commented: “With today’s decision, we make binding for seven years or more Microsoft’s commitments to put an end to its tying practices that may be preventing rivals from effectively competing with Teams.”

Ribera further added, “Today’s decision therefore opens up competition in this crucial market, and ensures that businesses can freely choose the communication and collaboration product that best suits their needs.”

Withdrawal of Complaints

Notably, both Slack and Alfaview, companies that initially filed complaints regarding Teams, have withdrawn their objections following a market test conducted by the Commission earlier in the year.

Note: This report has been updated to include a statement from Microsoft.