Microsoft To Separate Teams From Office Package Globally After EU Antitrust Concerns

On Monday, the American tech giant announced its decision to offer Teams, its chat and video application, as a separate product globally, independent of its Office suite. This move comes after the company took similar actions in Europe last year in response to antitrust concerns raised by the EU and to avoid potential fines.

Since 2020, the European Commission has been investigating Microsoft’s Office and Teams package in response to complaints by Salesforce-owned competing workspace messaging app Slack.

In 2017, Microsoft introduced Teams as a complimentary feature within Office 365, extending its suite of services to customers at no extra cost. It replaced Skype for Business and saw a significant spike in demand during the pandemic because of its video conferencing capability.

However, competitors complained that bundling the products together gives Microsoft an unfair advantage. Following these complaints, the tech giant began selling each product separately in the EU and Switzerland last October.

A Microsoft spokesperson said, “To ensure clarity for our customers, we are extending the steps we took last year to unbundle Teams from M365 and O365 in the European Economic Area and Switzerland to customers globally.” They added, “Doing so also addresses feedback from the European Commission by providing multinational companies more flexibility when they want to standardise their purchasing across geographies.”

In 1998, the Justice Department sued Microsoft for using its dominance of the Windows platform to hinder competition from rival web browsers. Following the lawsuit, the company eventually agreed to concessions, resulting in the relaxing of its control over the software that computer manufacturers could pre-install on their products.

According to analysts, after this change, internet browsers in competition rose in demand, but Microsoft’s separation of Teams from Office may not have had as dramatic an effect.

RBC Capital Markets analyst Rishi Jaluria said, “Enterprise products are a different beast and Teams is so embedded into workflows that I don’t think this has that same impact.”

According to Sensor Tower data, last October, following the separation of Microsoft Teams and Microsoft 365 and Office Suites, the platform hasn’t seen a real change in its number of users. Forecasts show that Microsoft Teams’ mobile app is expected to maintain relatively steady Monthly Active Users figures in the first quarter of 2024, with an expected 19 million users. This projection shows little change compared to the fourth quarter of 2023.

Microsoft announced in a blog post that it will be introducing a fresh range of commercial Microsoft 365 and Office 365 suites without Teams to markets outside the European Economic Area (EEA) and Switzerland. However, the post also unveiled plans for a standalone Teams offering tailored specifically for Enterprise customers within these regions.