Microsoft to Avoid EU Penalty by Proposing to Separate Teams
Microsoft is likely to evade a significant antitrust penalty after the European Union received favorable reactions to the US software giant’s proposal to resolve an investigation concerning the purportedly unlawful bundling of its Teams video-conferencing application.
EU regulators are expected to accept Microsoft’s commitment to separate Teams from its highly popular Office suites, according to sources familiar with the situation, who requested not to be named. The decision follows a market test in which competitors and clients did not voice any significant concerns, the sources indicated.
The choice — anticipated to receive formal approval in the next few weeks — is expected to signify a break in tense EU-US relations after President Donald Trump’s recent criticisms of Brussels’ efforts against Silicon Valley. The European Commission had earlier cautioned Microsoft that its exploitation of market dominance since 2019 provided Teams an inequitable edge over competitors.
As part of the settlement, Microsoft will consent to sell Teams independently from its Office 365 and Microsoft 365 bundles. The agreements involve Microsoft needing to lower prices for bundles that exclude Teams and to enhance compatibility for competitor software utilizing Microsoft services. The individuals mentioned that the choice remains in a preliminary stage and the timeline might still be delayed.
Neither the EU Commission nor Microsoft provided comments regarding the forthcoming approval of the commitments.
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The EU’s case stemmed from a complaint made by the messaging platform Slack in 2019. Salesforce Inc., a company that offers cloud-based customer management software, acquired Slack in 2021 for $27.7 billion.
The forthcoming Teams decision comes after harsh criticism from the White House regarding the manner in which the EU’s influential competition regulator has monitored US technology companies. This week, the commission postponed its plans to penalize Google due to worries that the choice might incite a reaction from Trump.
Even with the revelation of several multibillion-euro penalties against Big Tech in recent years, the commission in Brussels is more eager to negotiate settlements with companies to prevent legal disputes regarding supposed anti-competitive behavior.
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In other investigations into suspected dominance abuse, Apple Inc. committed to a deal to make its mobile wallet technology accessible to competitors, while Amazon.com Inc. restructured its marketplace “Buy Box” and consented to cease using private data.