Microsoft seeks to placate EU with pledges to unbundle Teams, Office

Microsoft on Friday made fresh commitments to unbundle its Office 365 and Microsoft 365 software suites from its Teams workplace communication app in an effort to address competition concerns from European regulators and avoid a possible antitrust fine.

The European Commission, which is the executive arm of the European Union, said in a statement Friday that Microsoft made a series of commitments to address concerns over the tying of Teams to its widely-used productivity tools, such as Word and Outlook.

Under the proposals, Microsoft has said it will make versions of Office 365 and Microsoft 365 available without Teams at a reduced price, as well as allow customers to switch to the tools without Teams, including under existing contracts.

Microsoft also committed to offer Teams' competitors increased interoperability with other Microsoft products and let customers move their data out of Teams to competing products. Interoperability refers to the practice of allowing different applications to communicate with each other more easily.

"The proposed commitments are the result of constructive, good-faith discussions with the European Commission over several months," Nanna-Louise Linde, vice president of European government affairs at Microsoft, said in a statement.

"We believe that they represent a clear and complete resolution to the concerns raised by our competitors and will provide European customers with more choices."

The EU has been scrutinizing Microsoft's tying of Teams with its popular Office productivity suite following a legal claim made by workplace messaging app Slack in 2020 that the bundle represented an abuse of market power.

Slack was acquired by Salesforce for $27.7 billion in 2021.

Sabastian Niles, Salesforce's president and chief legal officer, said 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," he added.

Microsoft previously made a pledge to unbundle Teams from Office in 2023, offering to sell Microsoft 365 without the chat and videoconferencing service at a discounted price. It then expanded on that move globally with an offer to sell the two products separately.

Friday's news marks an attempt by the Redmond, Washington-based tech titan to end the EU dispute and avert a potential hefty antitrust fine.

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