Microsoft to separate Teams and Office globally

BRUSSELS — Microsoft will sell its chat and video app Teams separately from its Office product globally, the US tech giant said on Monday, six months after it unbundled the two products in Europe in a bid to avert a possible European Union antitrust fine.

The European Commission has been investigating Microsoft’s tying of Office and Teams since a 2020 complaint by the Salesforce-owned competing workspace messaging app Slack.

Teams, which was added to Office 365 in 2017 for free, subsequently replaced Skype for Business and became popular during the pandemic due in part to its videoconferencing.

Rivals, however, said packaging the products together gives Microsoft an unfair advantage. The company started selling the two products separately in the EU and Switzerland on Oct 1.

“To ensure clarity for our customers, we are extending the steps we took last year to unbundle Teams from M365 and O365 in the European Economic Area and Switzerland to customers globally,” a Microsoft spokesperson said.

After the United States’ Justice Department sued Microsoft in 1998 for using its dominance of the Windows platform to stifle competition from rival web browsers, the company eventually made concessions that loosened its control of what software computer manufacturers could install on their products.

Rival internet browsers surged in popularity following that change, but Microsoft’s separation of Teams from Office may not have as dramatic an effect, analysts said.

“Enterprise products are a different beast and Teams is so embedded into workflows that I don’t think this has that same impact,” RBC Capital Markets analyst Rishi Jaluria said.

After Microsoft Teams was unbundled from the Microsoft 365 and Office Suites in Europe in October, the platform has seen the size of its user base remain mostly unchanged, figures from Sensor Tower showed.

The unbundling may not be enough to stave off EU antitrust charges, which will likely be sent to the company in the coming months, as rivals criticize the level of fees and the ability of their messaging services to function with Office web applications in their own services, sources said.

“This move may not completely ward off further regulatory scrutiny, but showing regulators Microsoft is willing to be proactive could still soften the stance by regulators,” Gil Luria, a senior software analyst at D.A. Davidson, said.