Microsoft (NASDAQ:MSFT) has announced its intention to decouple its chat and video application, Teams, from its Office suite, making it more compatible with competing software products. This move, revealed on Thursday, is a strategic response to potentially avert an antitrust penalty from the European Union.
This decision comes a month after the European Commission initiated an inquiry into Microsoft’s practice of bundling Office and Teams, prompted by a complaint from Slack, the workspace messaging app owned by Salesforce, in 2020.
Despite Microsoft’s initial attempts to address these concerns, they failed to alleviate the issues raised.
Teams was integrated into Office 365 at no extra cost in 2017. Eventually, it supplanted Skype for Business and gained significant popularity during the pandemic, largely due to its video conferencing capabilities.
Nanna-Louise Linde, Microsoft’s Vice President for European Government Affairs, stated in a blog post, “Today we are introducing proactive changes designed to meaningfully address these concerns, even as the European Commission’s investigation continues, and we fully cooperate with it.”
The proposed changes are designed to tackle two main concerns raised by the EU: the ability for customers to opt for an Office suite without Teams at a lower cost than those bundled with Teams, and the enhancement of interoperability between Microsoft 365, Office 365 suites, and competing communication and collaboration solutions.
These modifications, set to take effect on October 1st, will apply to the European and Swiss markets.
In terms of pricing, Teams will now be offered at a reduced rate, 2 euros less per month or 24 euros ($26.17) annually, for Microsoft’s core enterprise clients – a substantial segment of the company’s European commercial operations.
For new enterprise customers, Teams can be acquired separately for 5 euros monthly or 60 euros annually. Existing enterprise customers already using a suite with Teams will have the choice to retain their current setup or transition to a suite without Teams.
Additionally, Microsoft has plans to develop a fresh approach to hosting the Office web applications within competing apps and services, akin to the existing strategy employed with Teams.