Microsoft has proposed widening the price gap between its Office package bundled with Teams and the standalone software to avoid a potential EU antitrust penalty, as reported by three sources in Brussels on Feb 10.
This move follows a complaint by Salesforce-owned Slack five years ago to the European Commission regarding Microsoft's coupling of Teams with Office. In 2023, German competitor alfaview brought similar concerns to the EU. Teams, integrated into Office 365 for free in 2017 and later replacing Skype for Business, gained popularity during the pandemic for its video conferencing capabilities.
By raising the price of Office with Teams, Microsoft hopes to create space for competitors to offer their solutions at attractive prices and potentially entice users to switch platforms. The company plans to sell Office without Teams at a 2 euro discount compared to the bundled version, while offering Teams as a standalone product for 5 euros per month.
The European Commission has invited feedback from select firms, with a deadline this week, before deciding on a formal market assessment. Microsoft has also proposed improved interoperability conditions to facilitate fair competition.
Both Microsoft and the EU competition authority declined to comment on the matter. Notably, Microsoft faced significant EU antitrust fines totaling 2.2 billion euros in the past for product tying. Potential EU fines can amount to 10% of a corporation's global yearly revenue.
Acceptance of Microsoft's proposal could redirect the Commission's focus and resources towards ongoing investigations involving Apple and Google, according to one informant.
(1 euro equals approximately 1.03 dollars)