Microsoft faces scrutiny after separating Teams and Office

Following the European Commission antitrust investigation, Microsoft started unbundling Teams from Microsoft Office and 365 suites. Teams have been a part of Microsoft 365 since 2017, and its separation will cause the separate selling of the Teams video and chat app in all countries.

Microsoft Teams was initially included in the Microsoft 365 package along with Word, PowerPoint, Excel, Outlook, and other applications. Its integration replaced Skype for Business and gained significant popularity during the pandemic. However, its inclusion in subscription packages drew scrutiny for potential anti-competitive practices.

Packages gave Microsoft Office and Teams an unfair advantage

The origin of the scrutiny traces back to when the rivals, especially Salesforce-owned Slack, deemed the packaging of products together an anti-competitive act. They added that it gave Microsoft an unfair advantage. The European Commission has been investigating the merger of Microsoft Office and Teams since 2020. And, to avert the possible fine, Microsoft started separating Teams from Office back in October 2023.

Microsoft proactively reacted to the European competition scrutiny by saying, “We will continue to cooperate with the Commission and remain committed to finding solutions that will address its concerns”.

“To ensure clarity for our customers, we are extending the steps we took last year to unbundle Microsoft Teams from 365 and 365 in the European Economic Area and Switzerland to customers globally. Doing so also addresses feedback from the European Commission by providing multinational companies more flexibility when they want to standardize their purchasing across geographies,” a Microsoft spokesperson told Reuters.

However, sources have told Reuters that the unbundling alone will not suffice antitrust charges, as the rivals might even criticize the level of the charges.

Impact of change on Microsoft

Several analysts have said that Microsoft’s separation of Teams from Office may not have a significant impact. Meanwhile, a few companies might indeed consider shifting to rivals like Slack or Google Chat. Moreover, Sensor Tower Data quoted that even after the unbundling started in October 2023, the majority of the user count has remained unchanged.

For fresh customers, Microsoft is planning to price Teams alone at $5.25 per user per month. Meanwhile, Office packages without Teams will be charged from $7.75 to $54.75, depending on the package features per user per month. Figures might vary from country to country.