EU backtracks on Microsoft Teams antitrust case

Microsoft avoided a possible hefty EU antitrust fine by offering customers reduced prices for Office products excluding Teams, a move that comes amid rising tensions with the US over EU scrutiny of Big Tech.

The case was triggered by a 2020 complaint from Salesforce-owned Slack Technologies Inc to the European Commission, which accused Microsoft of bundling its chat and video app Teams with its Office product to gain an unfair advantage over rivals.

German rival alfaview filed a similar complaint in 2023.

Microsoft has agreed to widen the price gap by 50% between certain Microsoft 365 and Office 365 suites that exclude Teams and their equivalent versions that include Teams, including suites targeted at businesses, the EU competition enforcer said on Friday, confirming a Reuters story in May.

The price gap will range from 1 euro to 8 euros and remain in effect for seven years. The US software giant also committed to enhancing interoperability to facilitate competition for a period of 10 years. Microsoft's offer will be implemented globally.

European customers will also be able to export their Teams messaging data to rivals.

"Today's decision therefore opens up competition in this crucial market, and ensures that businesses can freely choose the communication and collaboration product that best suits their needs," EU antitrust chief Teresa Ribera said in a statement.

Ribera riled US President Trump last week after she slapped a €2.95 billion ($3.5 billion) fine on Alphabet's Google over its adtech practices, which he said was unfair and discriminatory, adding that the US may retaliate with more tariffs.

Nanna-Louise Linde, a Microsoft vice president for European government affairs, said in a statement: "We appreciate the dialogue with the Commission that led to this agreement, and we turn now to implementing these new obligations promptly and fully."

Alfaview Chief executive Niko Fostiropoulos said Microsoft's remedies would boost Europe's digital ambition.

"It sends an important signal for Europe's digital sovereignty: fair market conditions not only promote technological diversity, but also secure the long-term innovative strength of the European market," he said.

Microsoft, which has been fined a total €2.2 billion in past years for bundling two or more products together and other marketing tactics, has taken a more conciliatory approach with EU antitrust regulators in recent years.

EU antitrust fines can be as much as 10% of a company's global annual turnover.