Microsoft Settles Office/Teams Bundling Case with EU

After years of negotiations and product changes, Microsoft has settled an EU antitrust case and will offer Microsoft 365 in versions with and without Teams. The latter versions will cost less, of course, and Microsoft will allow customers to transition between these versions without incurring additional costs.

“Microsoft recently finalized an agreement with the European Commission in which we will expand interoperability and data portability resources, and make additional changes to licensing and pricing for Microsoft 365, Office 365, and Microsoft Teams,” the Microsoft 365 team explains. “These changes are designed to enhance flexibility, support open ecosystems, and give customers more options to meet their unique needs.”

Slack filed an EU antitrust complaint against Microsoft in 2020, alleging that the software giant engaged in the “illegal and anti-competitive practice of abusing its market dominance to extinguish competition” by bundling Teams with Office. Regulators in the European Commission launched an in-depth investigation in 2023 to assess whether the product tying was illegal.

As I pointed out at the time, Microsoft had bundled several generations of its pre-Teams communications products with Office (and the Office/Microsoft 365) for years before Slack even existed. And the software giant had considered acquiring Slack for $8 billion before Bill Gates told Microsoft CEO Satya Nadella that the company already had all the technologies it needed to take on the company.

And yes, Microsoft Teams started off as a Slack clone in the sense that its primary interface was chat-based collaboration for businesses. But since then, Microsoft has evolved Teams into a powerful platform that made is more compelling for its core enterprise customers. And the COVID-19 pandemic didn’t hurt: Usage in Teams surged from 44 million users in March 2020 to over 320 million today.

In any event, Microsoft has been trying to prevent EU sanctions since the European Commission announced the case. In August 2023, the software giant announced that it would unbundle Teams from its commercial Microsoft 365 plans in that locale. And then the following April, it said it would do the same worldwide. But the EU concluded the investigation and found that Microsoft’s bundling of Teams was illegal, in violation of Article 102 of the Treaty on the Functioning of the European Union (TFEU).

What the EU didn’t do was communicate to Microsoft what more it could do to avoid fines or structural remedies. And so Microsoft worked with the Commission to resolve the complaint. In May 2025, it published Microsoft’s proposed commitments to offer Microsoft 365 to business customers without Teams at lower prices, improve the interoperability of Microsoft 365 for competitors to Teams, and allow customers to migrate data from Teams to competing solutions so that stakeholders could weigh in. They have, and the Commission has accepted Microsoft’s commitments and closed the case.

Under the terms of the settlement, Microsoft will:

• Maintain its Microsoft 365/Teams add-in model so that third parties can integrate with the product line
• Maintain the AppSource marketplace so that third parties can distribute add-ins
• Make available APIs so that third parties can build solutions that help Microsoft 365 commercial customers to access their data in Microsoft Entra ID, Microsoft Exchange Online, Microsoft SharePoint Online, and Microsoft OneDrive in the same ways that Microsoft Teams can
• Make available APIs and tools so that customers can export their data from Teams and use it in competing solutions
• Launch a dedicated developer site that will consolidate the above-noted interoperability resources and maintain it over time
• Again offer versions of Microsoft 365 in the EU that include Teams alongside the versions that do not
• Establish a pricing model for various Microsoft 365 commercial offerings in which the versions without Teams are formally established and will be maintained for at least 7 years. For example, a Microsoft 365 E3 or E5 subscription without Teams will cost €8.00 less per user per month than the versions with Teams
• Adjust the pricing of Microsoft 365 commercial versions and Teams standalone offerings to match the pricing in the EU
• Allow EEA commercial customers on multi-year contracts to transition from Microsoft 365 versions with Teams to those without Teams while maintaining their percentage discount over a period of five years
• Ensure that any discounts Microsoft offers to customers that subscribe to versions of Microsoft 365 with Teams apply to versions without Teams as well

These changes all go into effect November 1, 2025, Microsoft says.

The European Commission published Microsoft’s commitments in full on its website if you want to know more.