Microsoft’s lengthy battle with European Union antitrust regulators over the bundling of its Teams collaboration software with Office 365 and Microsoft 365 has reached a pivotal moment. The company has proposed a series of far-reaching, global concessions that stand to reshape not only the way Microsoft packages its business software, but potentially the competitive dynamics of workplace communication and productivity platforms for years to come.
At the heart of this dispute lies a familiar playbook: Microsoft, leveraging its dominant ecosystem, integrating new functionality into its flagship productivity suites. In this case, Teams—a chat and collaboration platform—was tightly woven into Office 365 and Microsoft 365 since April 2019. On the surface, such bundling delivers clear convenience and a seamless user experience. However, when a market leader ties its own tools into ubiquitous products, this poses substantial hurdles for rivals and can distort competition.
Slack, the chief competitor and now a Salesforce subsidiary, was among the loudest voices crying foul. Back in 2020, Slack’s general counsel warned the European Commission that Microsoft was “reverting to past behavior” reminiscent of the company’s tactics during the “browser wars” of the late 1990s—a reference to Microsoft’s infamous strategy of tying Internet Explorer to Windows, which resulted in years of legal battles and landmark anti-monopoly rulings. Slack alleged that Microsoft made Teams unavoidable: force-installed, impossible to remove, and designed to lock customers into their ecosystem.
Such protestations did not fall on deaf ears. In 2023, after nearly half a decade of mounting discontent from both rivals and customers, the European Commission (EC) opened a formal investigation. Citing Articles 102 of the Treaty on the Functioning of the European Union (TFEU) and 54 of the Agreement on the European Economic Area, the EC found that Microsoft’s bundling of Teams with its business suites not only restricted competition in the unified communications and collaboration (UCC) market, but also maintained Microsoft's dominance in productivity software by exploiting interoperability limitations to disadvantage competitor products.
It’s in this context that Microsoft’s latest proposal emerges—a sweeping set of commitments, some of which would remain in effect for up to a decade and, crucially, extend beyond the EU to become global policy.
Microsoft’s rapprochement with regulators is a studied shift from its combative approach of the 1990s and early 2000s. Having suffered fines that once reached into the billions, Microsoft today seeks to resolve such disputes through negotiation and voluntary concessions, rather than protracted litigation. This reflects both the maturation of the company under Satya Nadella’s leadership and the shifting expectations of regulators and enterprise customers alike.
It’s important to note that Microsoft’s unbundling of Teams from Office 365 and Microsoft 365 began in the EU in 2023 as a unilateral move, but today’s concessions go much further—not only in geographic scope but also in functional impact. If approved in their current form, these remedies would bring the era of “forced” Teams deployment to a decisive end across the globe.
For Microsoft, the bundling of Teams made commercial sense, offering a “one-stop shop” for business communications. For competitors, it was a classic case of platform leverage—Microsoft customers were often forced to pay twice if they wanted to use both Teams (bundled) and a rival tool like Slack or Zoom. With the new commitments, businesses should, in theory, gain greater pricing clarity and flexibility to choose best-of-breed solutions without penalty.
Salesforce, which acquired Slack for a whopping $27.7 billion in 2021, has a vested interest in the outcome. The company has consistently claimed that competition is only meaningful when users face a genuine choice at the point of purchase, rather than being nudged by pre-bundled defaults.
In practical terms, the market may see:
There are several crucial threads to watch as events unfold:
For the enterprise buyer, these changes should deliver more freedom to select the best communication and collaboration tools, unencumbered by forced bundling or punitive pricing. For software developers and third-party vendors, the new commitments open doors that were previously shut—or, at best, barely ajar.
Yet, ultimately, the impact will be measured by vigilance: Are commitments meaningfully enforced, APIs truly interoperable, and users empowered to make real choices? The European Commission is betting that structural reform, real technical enablement, and transparent oversight can deliver on this promise. Microsoft, for its part, is wagering that open engagement with regulators is the smarter path to long-term stability and user trust.
The coming years will reveal whether this truce signals a new era of genuine competition, or simply a recalibration of the old rules. Either way, the message for tech giants is unmistakeable: dominance brings responsibility—and, increasingly, accountability—to customers, competitors, and society at large.
Source: theregister.com Microsoft proposes sweeping global concessions to Teams for up to a decade
Understanding the Roots of the Controversy
At the heart of this dispute lies a familiar playbook: Microsoft, leveraging its dominant ecosystem, integrating new functionality into its flagship productivity suites. In this case, Teams—a chat and collaboration platform—was tightly woven into Office 365 and Microsoft 365 since April 2019. On the surface, such bundling delivers clear convenience and a seamless user experience. However, when a market leader ties its own tools into ubiquitous products, this poses substantial hurdles for rivals and can distort competition.Slack, the chief competitor and now a Salesforce subsidiary, was among the loudest voices crying foul. Back in 2020, Slack’s general counsel warned the European Commission that Microsoft was “reverting to past behavior” reminiscent of the company’s tactics during the “browser wars” of the late 1990s—a reference to Microsoft’s infamous strategy of tying Internet Explorer to Windows, which resulted in years of legal battles and landmark anti-monopoly rulings. Slack alleged that Microsoft made Teams unavoidable: force-installed, impossible to remove, and designed to lock customers into their ecosystem.
Such protestations did not fall on deaf ears. In 2023, after nearly half a decade of mounting discontent from both rivals and customers, the European Commission (EC) opened a formal investigation. Citing Articles 102 of the Treaty on the Functioning of the European Union (TFEU) and 54 of the Agreement on the European Economic Area, the EC found that Microsoft’s bundling of Teams with its business suites not only restricted competition in the unified communications and collaboration (UCC) market, but also maintained Microsoft's dominance in productivity software by exploiting interoperability limitations to disadvantage competitor products.
Microsoft’s Evolving Concessions: From Unbundling to Global Commitments
The first signs of Microsoft’s willingness to yield came in 2023, when it began selling Office 365 and Microsoft 365 without Teams in the EU for a €2 monthly discount, and offering Teams as a standalone product for €5. While this pivot marked a significant capitulation, it was not enough to placate the EC. Regulators determined that Microsoft’s modifications were “insufficient to address its concerns,” noting that effective restoration of competition required more comprehensive remedies.It’s in this context that Microsoft’s latest proposal emerges—a sweeping set of commitments, some of which would remain in effect for up to a decade and, crucially, extend beyond the EU to become global policy.
The New Concessions at a Glance
Microsoft’s proposal is both granular and bold. The commitments—subject to EC approval and input from key stakeholders—include:- Reduced-Priced Suites Without Teams: Customers in the European Economic Area (EEA) can buy Office 365 and Microsoft 365 without Teams for a lower price than the bundled version. Microsoft also commits not to offer greater discounts for the bundled suite compared to the unbundled one, closing a potential loophole.
- Flexible Contract Switching: EEA customers would be allowed to recurrently switch to suites without Teams, even within their existing contract frameworks. Notably, these unbundled suites could be deployed in datacenters worldwide, aligning with the global nature of many enterprises’ IT infrastructure.
- Enabling Real Competition: Microsoft will grant rival software vendors and certain third parties vital interoperability with specified Microsoft products and services, including the ability to embed Office Web Applications (e.g., Word, Excel, PowerPoint) in competing products and to prominently integrate those products into Microsoft’s own productivity apps.
- Data Portability: EEA customers will gain the right to extract their Teams messaging data for use in rival software platforms, addressing a frequent criticism that data lock-in makes switching prohibitively complex.
- Monitoring and Enforcement: A monitoring trustee will ensure compliance, handle disputes, and report to the EC. Unresolved complaints will be subject to fast-track arbitration, demonstrating a meaningful commitment to accountability.
- Duration: Seven years for most commitments, but interoperability and data portability measures will last for a full decade.
- Global Alignment: Should the EC bind these commitments, Microsoft says it will apply the pricing and unbundling framework worldwide, magnifying the impact far beyond Europe’s borders.
Implications for Competition and Users
The antitrust drama surrounding Teams has wide-ranging consequences, not just for Microsoft or EU regulators, but for the very landscape of business software. Consider the numbers: Microsoft Teams boasts over 320 million monthly active users globally, dwarfing Slack’s estimated 65 million. In such a concentrated market, even modest barriers to entry or switching can have outsized effects on competition.Strengths of the Proposed Remedy
- Restoring Market Balance: By detaching Teams from Office by default and offering real price differentiation, Microsoft takes tangible steps to level the playing field. Such structural changes can open the door for smaller, innovative companies to challenge incumbents.
- Interoperability as a Driver: Allowing direct integration of competitive products—like embedding rival collaboration tools within Outlook or Excel—breaks down formidable technical barriers that previously stifled adoption of non-Microsoft solutions within enterprises. Historically, Microsoft's walled garden has been a notable impediment to open competition.
- Data Portability Empowers Users: Businesses often cite data portability as a crucial factor in software procurement. The ability to export Teams data into alternative platforms removes a key switching cost and supports a healthier, user-centric competitive environment.
- Regulatory Oversight: The appointment of a monitoring trustee with fast-track arbitration introduces a robust governance layer. Often, the lack of effective enforcement renders regulatory settlements toothless, but the inclusion of concrete oversight mechanisms is a strong safeguard.
- Global Consistency: Addressing one of the chief criticisms of region-specific remedies, Microsoft’s willingness to globally mirror its EU commitments sidesteps accusations of regulatory arbitrage and sets a powerful precedent for cross-border antitrust regulatory cooperation.
Potential Risks and Caveats
No antitrust remedy is without drawbacks or risks—especially when the incumbent enjoys a massive scale and deep integration within the IT stacks of the world’s largest organizations.- Entrenched Advantages May Persist: Critics argue that even if Teams is unbundled, Microsoft’s overwhelming brand presence, integration depth, and first-mover advantage may be enough to stifle competition for years to come. The old adage that “the damage has already been done” is not without foundation—Teams became ubiquitous during key pandemic years, becoming a de facto standard for many enterprises.
- Complexity in Enforcement: While a monitoring trustee is commendable, the devil often hides in the details. Ensuring that interoperability APIs are genuinely open, well-documented, and kept up to date will require technical scrutiny well beyond simple checklists. History has shown that vague or poorly enforced interoperability requirements can result in inadequate compliance.
- Price Cuts May Not Spur Real Switching: Merely lowering prices—even globally—may not catalyze real change, especially for large enterprises already deeply committed to the Microsoft stack. The inertia of organizational IT deployments, entrenched contracts, user training, and existing integration work can blunt the effect of new options, even if nominally attractive.
- Inclusion Versus Exclusion Paradox: Some observers caution that by allowing deep integration of competitors’ products, Microsoft could subtly shape partner dependencies and steer the user experience in ways that maintain their own products’ centrality, rather than ceding genuine market space to rivals.
- Limited Impact Outside the Enterprise Segment: The shaking up of the unified communications market will primarily affect large business customers. For small businesses and individual users, Teams is often still perceived as a ‘free’ add-on, bundled with other Microsoft tools, and these users may see little tangible change unless parallel consumer-focused remedies arise.
- Back-loaded Change: Much of the real, practical benefit for rival software vendors and for customers may only materialize years into the commitments, as APIs mature and users have natural contract renewal opportunities.
How We Got Here: Regulatory Context and Industry Backdrop
To contextualize Microsoft’s concessions, it’s essential to examine the broader antitrust environment. The EC has been increasingly aggressive in challenging Big Tech’s market behavior—witness landmark actions against Apple, Google, and Amazon in recent years. European regulators, often more interventionist than their American counterparts, see software bundling and closed ecosystems as structural threats to innovation and consumer choice.Microsoft’s rapprochement with regulators is a studied shift from its combative approach of the 1990s and early 2000s. Having suffered fines that once reached into the billions, Microsoft today seeks to resolve such disputes through negotiation and voluntary concessions, rather than protracted litigation. This reflects both the maturation of the company under Satya Nadella’s leadership and the shifting expectations of regulators and enterprise customers alike.
It’s important to note that Microsoft’s unbundling of Teams from Office 365 and Microsoft 365 began in the EU in 2023 as a unilateral move, but today’s concessions go much further—not only in geographic scope but also in functional impact. If approved in their current form, these remedies would bring the era of “forced” Teams deployment to a decisive end across the globe.
Market Impact and the Competitive Landscape
Microsoft’s dominance in productivity software is well-established. The company’s rapid pivot to cloud-delivered SaaS offerings over the past decade further solidified its lead, with Office 365—now Microsoft 365—becoming the gold standard for organizations of all sizes. The pandemic accelerated workplace transformation, turbocharging demand for real-time collaboration, video meetings, and integrated workflow tools—the very features Teams offered by default.For Microsoft, the bundling of Teams made commercial sense, offering a “one-stop shop” for business communications. For competitors, it was a classic case of platform leverage—Microsoft customers were often forced to pay twice if they wanted to use both Teams (bundled) and a rival tool like Slack or Zoom. With the new commitments, businesses should, in theory, gain greater pricing clarity and flexibility to choose best-of-breed solutions without penalty.
Salesforce, which acquired Slack for a whopping $27.7 billion in 2021, has a vested interest in the outcome. The company has consistently claimed that competition is only meaningful when users face a genuine choice at the point of purchase, rather than being nudged by pre-bundled defaults.
In practical terms, the market may see:
- Growth of Niche Solutions: Smaller collaboration platforms and communication tools may finally be able to access enterprise accounts that were previously off limits due to integration and migration concerns.
- Accelerated API Innovation: With real pressures to support interoperability, Microsoft and its rivals may prioritize open standards and robust APIs, contributing to a more vibrant, integrated software ecosystem.
- Renewed Focus on User Experience: As “forced” adoption diminishes, platforms will increasingly compete on design, ease of use, and unique features—not just on inertia or bundling.
What to Watch For: Next Steps and Open Questions
The EC’s consultation period invites feedback from interested parties, with a publicly visible summary to be published in the EU’s Official Journal. Industry stakeholders have one month to weigh in, after which the EC will determine whether Microsoft’s proposed remedies fully address its competition concerns.There are several crucial threads to watch as events unfold:
Will Structural Commitments Outlive Their Oversight?
A critical risk is that even when commitments are robust at the outset, their effectiveness may wane over time. Microsoft’s track record with previous antitrust settlements demonstrates both the positive possibilities of changed corporate conduct and the danger of backsliding once oversight relaxes.Is Global Alignment Sustainable?
Committing to global parity in pricing, product availability, and interoperability is an ambitious pledge. There may be pressure—whether from local regulators, major enterprise customers, or fast-moving market dynamics—to revisit these promises in the future. It remains to be seen whether Microsoft will hold the line or try to nuance its commitments if circumstances change.Can Rivals Capitalize?
Slack, Zoom, and myriad other smaller players now have a window of opportunity. But success will depend on their ability to deliver differentiated features, demonstrate superior user value, and support seamless migrations—especially for large organizations with complex compliance and integration needs.Will Users Actually Switch?
The question regulators always face is whether nominal competition translates to real-world market share shifts. Given Microsoft’s massive installed base, some analysts remain skeptical. Still, the removal of artificial barriers is a necessary (if not sufficient) condition for meaningful change.Conclusion: A Watershed Moment for Enterprise Collaboration
Microsoft’s proposed concessions mark one of the most significant regulatory-driven pivots in the business software industry since the browser wars, setting a high-water mark for what’s expected of dominant tech vendors in a more transparent, user-friendly era.For the enterprise buyer, these changes should deliver more freedom to select the best communication and collaboration tools, unencumbered by forced bundling or punitive pricing. For software developers and third-party vendors, the new commitments open doors that were previously shut—or, at best, barely ajar.
Yet, ultimately, the impact will be measured by vigilance: Are commitments meaningfully enforced, APIs truly interoperable, and users empowered to make real choices? The European Commission is betting that structural reform, real technical enablement, and transparent oversight can deliver on this promise. Microsoft, for its part, is wagering that open engagement with regulators is the smarter path to long-term stability and user trust.
The coming years will reveal whether this truce signals a new era of genuine competition, or simply a recalibration of the old rules. Either way, the message for tech giants is unmistakeable: dominance brings responsibility—and, increasingly, accountability—to customers, competitors, and society at large.
Source: theregister.com Microsoft proposes sweeping global concessions to Teams for up to a decade
