Microsoft Teams and Office Are Breaking Up as Regulators Close in

Microsoft Teams and Office Are Breaking Up as Regulators Close in

Microsoft Teams and Microsoft Office are breaking up, opting for a separate life that will make both its competitors and European regulators happy.

Microsoft confirmed to Gizmodo on Monday that it will sell Teams separately from its Office suite of products on a global level. The company has been offering Teams as a free add-on to customers who buy Office 365 and Microsoft 365 for years. Teams experienced huge growth during the covid-19 pandemic, growing from 20 million users in November 2019 to 44 million in March 2020 and 75 million one month later, according to Business of Apps. As of last year, Teams had more than 300 million users.

The news of the unbundling of Teams from Office 365 and Microsoft 365 was first reported by Reuters.

Trouble started brewing in 2020, when Slack, one of Teams’ main competitors, filed an antitrust complaint regarding the Teams and Office bundle with European Union regulators, arguing that Microsoft was using its dominant position with Office to force its customers to use Teams and hiding its true cost. Last year, European regulators announced they had opened a formal investigation into Microsoft’s bundling of Teams with Office 365 and Microsoft 365.

“The Commission is concerned that Microsoft may be abusing and defending its market position in productivity software by restricting competition in the European Economic Area (‘EEA’) for communication and collaboration products,” the European Commission said in a July 2023 press release. “In particular, the Commission is concerned that Microsoft may grant Teams a distribution advantage by not giving customers the choice on whether or not to include access to that product when they subscribe to their productivity suites and may have limited the interoperability between its productivity suites and competing offerings.”

One month after the announcement of the investigation, Microsoft said that it would no longer offer the Teams and Office bundle in the European Economic Area, which includes Norway, Lichtenstein, Iceland, Switzerland, and the 27 states of the European Union. The company continued, however, to offer the bundle to customers in other countries worldwide—until today.

In a statement to Gizmodo, Microsoft confirmed it had made the decision to unbundle Teams from its Office suite of products based on feedback from the European Commission.

“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,” a Microsoft spokesperson said. “Doing so also addresses feedback from the European Commission by providing multinational companies more flexibility when they want to standardize their purchasing across geographies.”

Beginning on April 1, customers will be able to choose whether to keep their current Teams + Microsoft 365 or Office 65 bundle, update, or switch to Microsoft’s new offerings that separate the products. For new customers, a standalone monthly subscription to Teams will reportedly cost $US5.25 per month, while Office without Teams will cost between $US7.75 and $US54.75 depending on the product.

You can check out the full price breakdown here.

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