Microsoft May Split Teams from Office 365 – Will It Satisfy Brussels Regulators?

Under pressure from Brussels, Microsoft is attempting to avoid a hefty financial penalty by proposing to remove Teams from Microsoft 365. However, the European Commission considers this move insufficient given its suspicions of anti-competitive practices by the company.

Brussels Targets Forced Integration of Teams

In July 2023, the European Commission formally charged Microsoft with abusing its dominant market position due to its consistent integration of Teams into its Office 365 and Microsoft 365 suites. The Commission believes this strategy restricts competition in the collaborative tools market, particularly disadvantaging alternatives like Slack and Zoom.

To sidestep a potentially massive fine, Microsoft has put forward several proposals, with the most significant being the separation of Teams from its key software offerings within the European Economic Area (EEA).

Microsoft has thus tried to defuse the situation and has proposed an Office version without Teams, improved interoperability with competing services, more technical information sharing, and enhanced pricing transparency. It is important to note that these concessions build on an initial decoupling effort that began in 2023 in some European countries.

The EU Seeks Lasting Guarantees

However, according to a report published this Friday, the Commission finds these proposals to be incomplete. Brussels is expecting Microsoft to provide more concrete assurances on how it intends to ensure fair competition over the long term.

The European Commission is not content with superficial measures designed to merely disguise the issue. It seeks for Microsoft to implement structural mechanisms that allow competing solutions fair access to the same markets.

This would include easier access to Microsoft’s ecosystem, more open APIs, and genuine transparency regarding costs and options available to business customers. Without a broader agreement, the threat of an antitrust fine remains a possibility, which could amount to up to 10% of the company’s global revenue.

A Critical Test for Digital Regulation in Europe

This case is part of a broader context of digital regulation in Europe, where the continent is looking to enforce its new rules, including the Digital Markets Act. By focusing on Microsoft regarding software integration, Brussels is testing its ability to regulate major American platforms, while trying not to hinder innovation or lose technological attractiveness.

For Microsoft, the stakes are high: to protect its cloud and office suite offerings, which are strategic levers against the rise of solutions from Google, Zoom, or Slack. The ongoing negotiations with the Commission could thus redefine the boundaries of competition in collaborative services in Europe.

However, current tensions with the USA (and new policies from Donald Trump) could complicate matters. Trump has vocally criticized Europe’s alleged unfair targeting of American tech companies.