By Foo Yun Chee
BRUSSELS (Reuters) – In an attempt to avoid potential antitrust penalties from the European Union, Microsoft has proposed adjusting the pricing structure for its Office product, which includes the chat and video app Teams, as reported by three sources familiar with the matter.
This development unfolds following complaints lodged by Salesforce-owned Slack to the European Commission five years ago, citing Microsoft’s integration of Teams with Office. A similar grievance was later brought forth by German competitor alfaview in 2023.
Teams, introduced to Office 365 in 2017 and gradually replacing Skype for Business, experienced a surge in popularity during the pandemic, particularly for its video conferencing capabilities.
By increasing the price of Office bundled with Teams, Microsoft aims to create a more level playing field for competitors to offer their solutions at competitive prices and potentially attract new users.
Notably, Microsoft separated Teams from Office in 2023, pricing Office without Teams at a 2 euro discount compared to the bundled option. Additionally, the standalone Teams application is offered at a monthly rate of 5 euros.
Sources indicate that the European Commission has reached out to various companies for feedback, setting a deadline for responses this week, before considering a formal market assessment. Microsoft purportedly also extended improved interoperability terms to facilitate fair competition among industry players.
Both the EU competition authority and Microsoft, previously subject to hefty antitrust fines totaling 2.2 billion euros ($2.3 billion) in the early 2000s for product tying practices, have refrained from commenting on the ongoing situation. It is worth noting that EU sanctions can amount to up to 10% of a company’s global annual revenue.
Should the Commission accept Microsoft’s proposed adjustments without imposing fines or finding any violations, it would allow the regulatory body to allocate more resources and attention to investigations concerning other tech giants such as Apple and Google, according to sources familiar with the matter.
(Reporting by Foo Yun Chee; Editing by Ros Russell)
