Microsoft has recently announced significant alterations to its Microsoft 365 and Office 365 offerings in response to concerns raised by European competition authorities. The European Commission’s formal investigation into the bundling of Microsoft Teams with these suites has prompted proactive measures from Microsoft to address these concerns, even as the investigation continues.
The modifications will impact customers within the European Economic Area and Switzerland. The aim is to tackle two central concerns identified by the Commission: firstly, the availability of business suites without Microsoft Teams at a lower cost compared to bundles with Teams; and secondly, enhancing interoperability between Microsoft 365, Office 365 suites, and other collaboration solutions.
While Microsoft recognizes the importance of modern work solutions encompassing advanced communication and collaboration capabilities, the company also acknowledges its role in fostering a competitive environment. The changes being implemented are intended to address the identified concerns to some extent, understanding that they may not completely resolve all issues but represent a positive step towards market improvements.
Outlined below are the specific measures Microsoft intends to adopt:
Commencing from October 1, 2023, Microsoft will be removing Microsoft Teams from its Microsoft 365 and Office 365 suites within the EEA and Switzerland. These suites will be offered without Teams at a reduced price (€2 less per month or €24 per year). This adjustment will apply to core enterprise customers. New enterprise customers can opt to purchase Teams separately for €5 per month or €60 per year. Existing enterprise customers with Teams will have the option to continue with their current suite or switch to a Teams-free version. For small businesses and frontline workers, Microsoft will continue to offer suites with Teams while simultaneously introducing a “without-Teams” option at a lower price.
Recognizing the significance of interoperability, Microsoft is committed to enhancing its existing resources pertaining to interoperability with Microsoft 365 and Office 365. The company currently offers comprehensive interoperability with its apps and services. The goal is to provide more assistance to companies seeking integration with Microsoft 365 and Office 365, ensuring smoother experiences for customers. To address feedback received during the investigation, Microsoft plans to create new support resources to guide application developers towards existing APIs and extensibility within Microsoft 365 and Office 365 that connect with Teams. This includes providing support to customers and independent software vendors (ISVs), along with guidance on data migration from Teams to other solutions.
In response to requests from Teams’ competitors, Microsoft is working on a method to enable third-party solutions to host Office web applications. This development will empower other apps and services to integrate the functionality of Microsoft Office applications such as Word, Excel, and PowerPoint, offering consistency and an alternative to building similar functionality from scratch.
These changes underscore Microsoft’s commitment to promoting healthy competition and addressing the concerns raised by European authorities. By implementing these measures, Microsoft aims to make tangible progress towards fostering a fairer marketplace and enhancing user experiences in the European context.