Microsoft’s entanglement with EU regulators over its bundling of the Teams workplace communication app with its Office 365 and Microsoft 365 software suites has rapidly evolved into one of the most consequential antitrust sagas in the global technology landscape. The stakes are substantial, not only for Microsoft but for competitors, business customers, and the broader dynamics of the tech industry in Europe and beyond.
At the heart of the dispute is Microsoft Teams—a once-niche, now-ubiquitous workplace chat and videoconferencing solution. Teams saw explosive growth, particularly as the pandemic turbocharged remote work across continents. Yet, its very success, greatly fueled by its integration with Office and Microsoft 365 suites—including Word, Excel, Outlook, and PowerPoint—sparked concerns among rivals and regulators alike.
In 2020, the messaging app Slack, which Salesforce would later acquire for $27.7 billion, filed a formal complaint with the European Commission (EC). At issue: Microsoft’s strategy of “tying” Teams to its dominant productivity suites. Slack characterized this as an abuse of market power, effectively pushing competitors to the margins by bundling Teams as a default part of Office subscriptions for vast swaths of European businesses.
This single complaint lit the fuse for a sweeping antitrust investigation by the EC, Europe’s top competition watchdog. The probe was not just about Teams or Slack—its ramifications rippled across how the EU polices digital competition, software interoperability, and the rights of customers to choose best-of-breed solutions.
Sabastian Niles, president and chief legal officer of Salesforce (Slack’s parent company), stated: “The European Commission’s announcement Friday further affirms that Microsoft’s anticompetitive practices with Teams have harmed competition and require a binding, enforceable, and effective remedy. We will carefully scrutinize Microsoft’s proposed commitments.” His comments echo the persistent skepticism among competitors that mere promises of unbundling, absent robust enforcement and technical safeguards for interoperability, might be insufficient to remedy past harms or prevent new ones.
However, some industry observers warn that pricing nuances could temper the real-world impact. If the “Teams-free” versions of Office are only marginally cheaper, or if customers face hurdles in disentangling existing contracts, Microsoft might still hold the upper hand in guiding purchasing decisions through pricing strategy rather than true freedom of choice. Early indications suggest the EC is keen to ensure that these price reductions are meaningful and that unbundling applies comprehensively across product tiers.
Technical details remain sparse, but the principle is clear: true interoperability lowers the friction for end-users who wish to assemble a toolkit that spans multiple vendors, rather than being locked into a single ecosystem. This move echoes broader mandates set out in the EU’s Digital Markets Act, which seeks to promote open standards and data portability across tech platforms.
Google, Apple, Amazon, and Meta have all adjusted features, pricing, and APIs in response to European decisions, often rolling out the changes more broadly to pre-empt legislative headaches elsewhere.
This approach, while calibrated to Europe’s market realities, is being closely monitored—and sometimes imitated—by regulators from California to Canberra.
Not only is Europe setting the agenda for unbundling and interoperability, it is also driving a deeper conversation about the responsibilities of digital “gatekeepers.” For end-users, this means a future where they can assemble their digital workspace toolkit with genuine freedom. For rivals, it means breaking down barriers that have previously tilted the field. For Microsoft, it’s a moment that calls for both humility and agility—forging a path between regulatory compliance and product innovation.
As the EC evaluates Microsoft’s pledges and competitors like Salesforce/Slack and Zoom lay out their own requirements, the coming months will determine whether theory becomes practice. If effective, these remedies could usher in an era of greater openness, flexibility, and competition within Europe’s digital workplace—a model with global resonance.
For now, Microsoft’s willingness to unbundle Office and Teams, bolster interoperability, and pivot on data portability is more than just regulatory compliance. It is a vivid signal that the battle for control over the digital workplace remains as contested as ever—and that no tech incumbent, no matter how deeply embedded, can take their dominance for granted.
As the dust settles, the ultimate beneficiaries should be end-users—businesses and their employees who will enjoy more options, potentially lower costs, and better integration between the digital tools they rely on every day. Yet, for Microsoft and its rivals, the battle for the enterprise productivity market remains very much alive—reshaped, but far from over.
Businesses across Europe and globally will need to closely monitor the unfolding landscape, weighing not only immediate price and product options but also the broader implications for data portability, platform commitment, and the evolving ecosystem of workplace technology. Decision-makers would do well to seek clarity on the technical, contractual, and strategic dependencies in their Microsoft relationship—because if there’s one clear lesson from this episode, it’s that the rules of the digital workplace game are being rewritten, and no one can afford to play by yesterday’s playbook.
Source: NBC 5 Chicago Microsoft seeks to placate EU with pledges to unbundle Teams, Office
At the heart of the dispute is Microsoft Teams—a once-niche, now-ubiquitous workplace chat and videoconferencing solution. Teams saw explosive growth, particularly as the pandemic turbocharged remote work across continents. Yet, its very success, greatly fueled by its integration with Office and Microsoft 365 suites—including Word, Excel, Outlook, and PowerPoint—sparked concerns among rivals and regulators alike.In 2020, the messaging app Slack, which Salesforce would later acquire for $27.7 billion, filed a formal complaint with the European Commission (EC). At issue: Microsoft’s strategy of “tying” Teams to its dominant productivity suites. Slack characterized this as an abuse of market power, effectively pushing competitors to the margins by bundling Teams as a default part of Office subscriptions for vast swaths of European businesses.
This single complaint lit the fuse for a sweeping antitrust investigation by the EC, Europe’s top competition watchdog. The probe was not just about Teams or Slack—its ramifications rippled across how the EU polices digital competition, software interoperability, and the rights of customers to choose best-of-breed solutions.
Microsoft’s Changing Position: Unbundling, Discounts, and Interoperability
Faced with mounting regulatory pressure, Microsoft has—over several rounds—offered a string of concessions to address the EC’s concerns.The Original Unbundling Effort
In 2023, Microsoft took the first major step, agreeing to sell Office 365 and Microsoft 365 without Teams at a discounted price for European customers. This move, while significant, left room for criticism. As several analysts noted, merely stripping out Teams from the bundle did not necessarily address deeper concerns about interoperability, customer lock-in, or competitive neutrality.The Expanded Commitments: May 2025
Recently, in a bid to bring the saga to a conclusion and avert a potentially massive antitrust fine, Microsoft deepened its commitments, as reported by the European Commission and covered by multiple outlets including NBC and Reuters. The new undertakings include:- Wider Unbundling: Both Office 365 and Microsoft 365 will be available without Teams at a further reduced price, not only for new customers but also allowing switching within existing contracts.
- Improved Interoperability: Microsoft pledges to give Teams’ competitors better integration capabilities with Office products—addressing “walled garden” concerns that alternative collaboration tools struggle to work seamlessly in Microsoft-dominated work environments.
- Data Portability: Customers will have enhanced rights to move their data out of Teams into rival products, lowering switching costs and fostering real competition in the sector.
The EU’s Ongoing Antitrust Crusade
The EU, via the European Commission, has built a formidable track record in policing dominance in digital markets, having previously levied record fines on Google and Apple for similar “tying” and “bundling” strategies. In the eyes of European regulators, allowing dominant software platforms to leverage their position to exclude rivals or dictate terms carries broad ramifications for innovation, customer choice, and the health of the European digital economy.Sabastian Niles, president and chief legal officer of Salesforce (Slack’s parent company), stated: “The European Commission’s announcement Friday further affirms that Microsoft’s anticompetitive practices with Teams have harmed competition and require a binding, enforceable, and effective remedy. We will carefully scrutinize Microsoft’s proposed commitments.” His comments echo the persistent skepticism among competitors that mere promises of unbundling, absent robust enforcement and technical safeguards for interoperability, might be insufficient to remedy past harms or prevent new ones.
A Closer Look: What the Latest Pledges Mean for Customers and Competitors
Unbundling and Pricing
For European businesses large and small, the ability to purchase Office or Microsoft 365 without Teams—at a lower cost—is a direct win. It translates into reduced costs for those already committed to other communications platforms (such as Slack, Zoom, or Google Workspace) and offers flexibility in deployment across multinational organizations that might prefer a mix of tools.However, some industry observers warn that pricing nuances could temper the real-world impact. If the “Teams-free” versions of Office are only marginally cheaper, or if customers face hurdles in disentangling existing contracts, Microsoft might still hold the upper hand in guiding purchasing decisions through pricing strategy rather than true freedom of choice. Early indications suggest the EC is keen to ensure that these price reductions are meaningful and that unbundling applies comprehensively across product tiers.
Interoperability and Fair Play
A longstanding critique, especially among rivals, has been the difficulty of integrating alternative messaging or video platforms with Microsoft’s productivity tools. The new commitments reportedly open the door for third-party apps like Slack and Zoom to “plug in” more deeply—ensuring, for instance, that calendar invites, document sharing, and messaging updates can flow seamlessly between environments.Technical details remain sparse, but the principle is clear: true interoperability lowers the friction for end-users who wish to assemble a toolkit that spans multiple vendors, rather than being locked into a single ecosystem. This move echoes broader mandates set out in the EU’s Digital Markets Act, which seeks to promote open standards and data portability across tech platforms.
Portability and Data Rights
Just as crucial is Microsoft’s decision to boost data portability—an area where the EU’s General Data Protection Regulation (GDPR) has already set precedent. For too long, critics argue, the practical difficulties in extracting conversation histories, attachments, user lists, and metadata from one platform to another have discouraged switching. By making this process easier, Microsoft signals a willingness to level the competitive playing field, though rivals will be scrutinizing the practical implementation.The Broader Impact: A Template for Global Tech Competition Policy?
Microsoft’s saga with Teams and Office is more than just a regional dispute—it may serve as a template for antitrust oversight and tech regulation globally.Precedent for Enforcement
European antitrust actions have a track record of spilling over into global business strategies. In the wake of EU action, Microsoft has expanded unbundling and interoperability efforts worldwide. This is partly pragmatic—maintaining consistent product architectures is far cheaper and less risky than running fragmented regional versions—but also signals a recognition that regulators in other jurisdictions (including the US and UK) watch European precedents closely.Google, Apple, Amazon, and Meta have all adjusted features, pricing, and APIs in response to European decisions, often rolling out the changes more broadly to pre-empt legislative headaches elsewhere.
The Regulatory Landscape: Digital Markets Act and Beyond
Notably, the EU’s Digital Markets Act (DMA), which entered into force in 2023, further embeds core “gatekeeper” responsibilities on the biggest tech players. Requirements around unbundling, interoperability, and data portability are now enshrined in law, giving the EC greater leverage to demand—and enforce—sweeping changes to business models which previously relied on walled gardens and lock-in.This approach, while calibrated to Europe’s market realities, is being closely monitored—and sometimes imitated—by regulators from California to Canberra.
Risks, Critiques, and Open Questions
Is Microsoft Doing Enough?
Despite the scope of Microsoft’s latest proposals, skepticism lingers in both regulator and competitor circles about whether true competitive balance can be restored.- Enforcement Gaps: If Microsoft retains subtle advantages in Office’s default settings, in-app prompts, or update cycles—nudging users towards Teams even after unbundling—critics say the competitive harm could persist.
- Technical Details: The devil is in the implementation. How open will Microsoft’s APIs be? Will third-party integrations offer feature parity to Teams? Early commitments are promising, but historically, platform vendors have been accused of creating second-class citizen status for rivals.
- Market Momentum: Teams already enjoys enormous installed base advantage in the enterprise market. For competitors, regaining lost ground may require more than regulatory remedies; onboarding and migration incentives may become crucial.
Risks for Customers and Partners
There are potential unintended consequences for customers as well:- Complex Licensing Choices: Unbundling, if not managed carefully, could complicate procurement. IT departments might face confusing options, disparate support channels, or difficulty in integrating licenses across regions.
- Hidden Switching Costs: Even with data portability, the real cost (technology reconfiguration, retraining staff, revising processes) of switching away from Teams can be high, especially for large organizations.
Regulatory Overreach?
Some industry voices—including those historically supportive of Microsoft—warn of potential regulatory overreach. The danger, they argue, is that excessive intervention could stifle innovation or penalize success. If every improvement or new product from a market leader is subject to suspicion, the argument goes, firms might underinvest or delay launches. Balancing deterrence of genuine anticompetitive conduct with preservation of incentives for R&D remains a delicate act.Looking Ahead: The Shifting Sands of Tech Competition
Microsoft’s latest EU commitments are a concrete response to a very real regulatory headwind. Yet, in many respects, the company is simply the highest-profile example of a structural shift in how governments—especially in Europe—manage tech competition.Not only is Europe setting the agenda for unbundling and interoperability, it is also driving a deeper conversation about the responsibilities of digital “gatekeepers.” For end-users, this means a future where they can assemble their digital workspace toolkit with genuine freedom. For rivals, it means breaking down barriers that have previously tilted the field. For Microsoft, it’s a moment that calls for both humility and agility—forging a path between regulatory compliance and product innovation.
As the EC evaluates Microsoft’s pledges and competitors like Salesforce/Slack and Zoom lay out their own requirements, the coming months will determine whether theory becomes practice. If effective, these remedies could usher in an era of greater openness, flexibility, and competition within Europe’s digital workplace—a model with global resonance.
For now, Microsoft’s willingness to unbundle Office and Teams, bolster interoperability, and pivot on data portability is more than just regulatory compliance. It is a vivid signal that the battle for control over the digital workplace remains as contested as ever—and that no tech incumbent, no matter how deeply embedded, can take their dominance for granted.
Conclusion: A Cautious Step Forward Amid Fierce Scrutiny
Microsoft’s agreement to unbundle Teams from Office in Europe and to offer improved interoperability with rival apps is emblematic of a shifting era in tech policy—one where the bar for competitive behavior is continually being raised by vigilant regulators and empowered competitors. While the latest pledges are a meaningful step forward, whether they will truly satisfy the European Commission and rival firms remains to be seen.As the dust settles, the ultimate beneficiaries should be end-users—businesses and their employees who will enjoy more options, potentially lower costs, and better integration between the digital tools they rely on every day. Yet, for Microsoft and its rivals, the battle for the enterprise productivity market remains very much alive—reshaped, but far from over.
Businesses across Europe and globally will need to closely monitor the unfolding landscape, weighing not only immediate price and product options but also the broader implications for data portability, platform commitment, and the evolving ecosystem of workplace technology. Decision-makers would do well to seek clarity on the technical, contractual, and strategic dependencies in their Microsoft relationship—because if there’s one clear lesson from this episode, it’s that the rules of the digital workplace game are being rewritten, and no one can afford to play by yesterday’s playbook.
Source: NBC 5 Chicago Microsoft seeks to placate EU with pledges to unbundle Teams, Office