Microsoft is likely to dodge a significant EU antitrust fine after revising how it sells its Office and Teams software packages. The European Commission seems inclined to accept Microsoft’s latest offer, which includes changes aimed at creating a more level playing field for competitors. This comes amid ongoing friction between the EU and the U.S. over regulatory scrutiny of major tech firms. The final outcome isn’t guaranteed yet, but signs suggest Microsoft is heading in the right direction.
The trouble started back in 2020 when Slack, owned by Salesforce, filed a complaint accusing Microsoft of unfairly bundling its Teams chat and video app with its Office suite. Slack claimed this move gave Microsoft an undue advantage in the workplace collaboration space. The heat intensified when German company alfaview submitted a similar complaint in 2023, keeping the pressure on the EU’s competition regulators to act.
In response, Microsoft took steps to separate Teams from Office in 2023, pricing the unbundled Office product 2 euros cheaper, while offering Teams as a standalone option at 5 euros a month. However, rivals felt this wasn’t enough to restore fair competition, prompting Microsoft to make further pricing adjustments earlier this year. Their latest proposal reportedly includes better interoperability to help competitors integrate more smoothly.
While the European Commission hasn’t issued a final ruling, it’s expected to seek industry feedback in the coming months before making a decision. Microsoft, which has already paid out 2.2 billion euros in past EU fines, is clearly aiming to avoid another costly penalty. The EU’s review process, especially involving a market test, could still influence the outcome.
Interestingly, the backdrop to all this is growing transatlantic tension over how the EU regulates American tech giants. Former U.S. President Donald Trump has even threatened tariffs in retaliation for such actions. Regardless of political overtones, Microsoft’s latest moves suggest it’s taking the EU’s concerns seriously this time.
Source: Reuters