Microsoft risks hefty fine for bundling Teams with Office 365

Microsoft might be breaking the EU’s antitrust regulation by confining its collaboration product Teams with productivity apps in Office 365 and Microsoft 365 for businesses.

By doing so, the European Commission is concerned that the Redmond-based tech company is giving itself an unfair distribution advantage.

By implementing interoperability limitations between Teams and Software-as-a-Service (SaaS) products by competitors, Microsoft strengthens its favorable position even further, making it harder for the competition to compete.

In addition, combining Teams with other Microsoft productivity apps and limiting interoperability with SaaS apps from the competition, is detrimental for customers: they have little to no choice when subscribing to Office 365 or Microsoft 365.

“We are concerned that Microsoft may be giving its own communication product Teams an undue advantage over competitors, by tying it to its popular productivity suites for businesses,” Margrethe Vestager, Executive Vice-President in charge of competition policy, says in a statement.

“Preserving competition for remote communication and collaboration tools is essential as it also fosters innovation on these markets,” she added.

Brad Smith, Vice Chair and President at Microsoft, repeated his standpoint on the willingness to resolve the problem. “Having unbundled Teams and taken initial interoperability steps, we appreciate the additional clarity provided today and will work to find solutions to address the Commission's remaining concerns,” he said to Reuters.

If found guilty, Microsoft faces a multi-million euro penalty. The fine can amount to 10 percent of the company’s worldwide revenue.

In 2017 Microsoft added Teams to its Office 365 service pack. In July 2023 Slack filed a complaint that the U.S. tech company was violating European antitrust rules. By offering Teams to businesses as part of the Office 365 bundle, Slack is said to have lost a lot of customers.

That’s when the European Commission launched an investigation into the matter. The same year Microsoft decided to no longer bundle Teams with Word, Excel and Outlook.