News

Microsoft Will Unbundle Teams from Office Business Products in EU Countries

Microsoft's proposed changes stem from a European Commission investigation.

• By Kurt Mackie
• 08/31/2023

Microsoft announced on Thursday that it is unbundling its Teams collaboration product from the bulk of its Microsoft 365 and Office 365 productivity suites, but just in European Union (EU) member countries and Switzerland.

Microsoft's statement that Teams is getting unbundled from Office products for the EU market comes after the EU's European Commission announcement in July that it was investigating Microsoft's product bundling as a possible violation of EU competition rules. It stems from 2020 complaint by Slack Technologies, a maker of a competing solution, that Microsoft was using its Office market dominance to monopolize the collaboration software market by bundling Teams.

Microsoft's Proposed Remedies
Microsoft proposed some remedies after having "constructive discussions with the European Commission." The following measures will "lead to immediate and meaningful changes in the market," the announcement suggested:

• Unbundle Teams from Microsoft 365 and Office 365 suites in the European Economic Area (EEA) and Switzerland, "beginning October 1, 2023." A "standalone" Teams product also will be offered in those markets.
• Aid non-Microsoft product interoperability with Microsoft 365 and Office 365 suites via "new support resources to better organize and point application developers to the existing and publicly available application programming interfaces (APIs) and extensibility in Microsoft 365 and Office 365 apps and services that connect with Teams." This effort will include information on "how data can be removed from Teams and used in another solution."
• Develop "a new method for hosting the Office web applications within competing apps and services much like Microsoft accomplishes in Teams."

The announcement suggested that these measures were just a "constructive step," and would not necessarily address all concerns.

Microsoft is just adopting these measures for its business product users in the EEA and Switzerland. It's not making any changes to unbundle Teams from its consumer Office offerings. Also, Microsoft isn't making any changes to Microsoft Teams Essentials, as noted in its FAQ publication, which also shows the pricing changes due to the unbundling of Teams.

While prices will be lower for EEA and Switzerland users of the unbundled Microsoft 365 and Office 365 productivity suites that lack Teams, Microsoft's pricing discount will vary widely across its offerings. Basically, Microsoft is reducing the price by just one or two euros, even though the Microsoft Teams standalone product will cost €5 per user per month.  

No Automatic Product Switching
The new unbundled offerings will be available starting on Oct. 1. However, organizations in the EEA and Switzerland won't get automatically switched to the new unbundled Microsoft 365 and Office 365 products.

Instead, those organizations can switch their subscriptions to the unbundled products at the time of their subscription "anniversary" or "renewal" dates, if wanted, or they can continue to use the bundled products.

The unbundled products will not necessarily be available to organizations outside the EEA and Switzerland, although Microsoft's FAQ stated that it is possible to "set up an EEA/Switzerland enrollment with an EEA/Switzerland billing address to acquire these suites." One catch with that approach, though, is that datacenters in the EEA and Switzerland would be used with the subscription.

Reactions
Slack Technologies seems to not have published a reaction to Microsoft's proposed concessions. A European Commission comment on Microsoft's proposed remedies was not available at press time, so it's unclear if the agency concurs with Microsoft's actions.

However, other complainants, such as the Coalition for Fair Software, were more vocal. Executive Director Ryan Triplette suggested that Microsoft would only fairly compete if compelled to do so by government regulatory agencies.

"This announcement proves that Microsoft is capable of doing the right thing for its customers but chooses not to unless compelled by regulatory scrutiny," Triplette said in a released statement. "As we noted in our comment to the U.S. Federal Trade Commission (FTC), the tying of Teams to the Office Suite is not a regional or product-specific issue."

That FTC comment about Microsoft's restrictive licensing can be found at this page.

The Coalition for Fair Software is a lobbying group against unfair cloud services licensing terms. It initially launched as a collaboration between a French service providers association and a CIO association, per its Web site description. The coalition had consisted of more than a dozen companies that went unnamed, according to statements made last year.