After nearly two years of legal proceedings, a resolution in the Microsoft Teams case appears to be emerging. The European Commission initiated a formal investigation in July 2023, prompted by complaints from several companies, including Slack. By mid-2024, the Commission had shared its preliminary findings with Microsoft. The core issues identified were alleged abuse of a dominant market position dating back to at least April 2019, primarily through linked sales of Teams alongside Microsoft’s main productivity applications. This bundling was seen as an unfair competitive advantage, further compounded by restrictions on interoperability between Microsoft’s products and those of rival providers.
In response to these allegations, Microsoft introduced versions of Office 365 that exclude Teams. This strategy was first rolled out on October 1, 2023, in 31 countries across Europe—including the European Union, Iceland, Liechtenstein, Norway, and Switzerland—and was later expanded globally on April 1, 2024. Alongside this, Microsoft committed to enhancing access to its public APIs to improve interoperability. The company also announced plans to create new mechanisms that would allow Office Web Apps to be hosted on third-party platforms, thereby fostering a more open ecosystem.
However, the European Commission deemed these commitments insufficient. As a result, Microsoft has updated and expanded its proposals, which are now being subjected to a “market test.” Stakeholders and interested parties have until May 16, 2025, to submit their feedback and comments on the proposed measures.
Expectations of Larger Price Gaps… Reflecting the Actual Value of Teams
Pricing strategies are expected to see more significant gaps between versions with and without Teams. The European Commission specifies that for the “largest suites” of Office 365, the price difference will align with or exceed the value of Teams. In other words, the premium paid for the suite including Teams will genuinely reflect its added worth. Additionally, discounts or rebates for Teams or for packages that include it are expected not to surpass those available for suites without Teams. This approach aims to ensure that consumers pay a fair price corresponding to the service’s real value.
This pricing adjustment mainly applies to versions marketed to office workers. Microsoft also plans to implement similar pricing structures for its Frontline editions and across the global market.
Currently, Microsoft’s “Enterprise” editions of Office 365 no longer offer a version without Teams; instead, users must opt for a specific SKU—Teams Enterprise—costing €5 excluding VAT per user per month to access Teams. For small and medium-sized business plans (“Business”), the price gap between versions with and without Teams ranges from €1.20 to €2.40 with monthly subscriptions, or €1 to €2 with annual commitments. The optional Teams Essentials module is priced at €4.44 excluding VAT per month per user, or €3.70 when billed yearly.
Interoperability, Data Portability, and Global Deployment Commitments
Regarding interoperability, Microsoft has pledged to enable competitors’ Teams integrations to be prominently featured within Word, Excel, PowerPoint, and Outlook. Conversely, the company commits to incorporating Office Web Apps seamlessly into Teams, providing comparable functionalities across platforms. Microsoft also promises access to certain products and services, including their successors, for specific features, fostering a more open working environment.
A further commitment involves data portability: users will be able to extract their Teams messaging data for use elsewhere, facilitating smoother transitions and integrations. Additionally, organizations within the European Economic Area will be authorized to deploy Office suites minus Teams in data centers around the world. Long-term contract holders will also be periodically offered the option to switch to a Teams-free version, enhancing flexibility for enterprise clients.
These commitments are set to last for seven years from their respective start dates, with interoperability and data portability provisions valid for ten years, providing a substantial transitional period to adapt to these new standards.
Overall, these measures signal a move toward more transparent pricing, fairer competition, and greater openness within Microsoft’s productivity ecosystem, aligning with European regulatory expectations designed to foster a more competitive digital market.
