How Microsoft takes advantage of legislation to charge a high price for Teams

Microsoft has been in the crosshairs of the European Commission since last month, the latter having to assess whether the integration of Teams with Office 365 was an anti-competitive practice. The firm has decided to take the lead by dissociating its communication tool from the Office suite.

The European Commission last month launched an antitrust investigation against Microsoft for having integrated its Teams communication tool into its Office 365 suite. The subject of this investigation was to assess whether Microsoft had breached market rules against its competitors.

Remote collaboration and communication tools like Teams have become essential for many businesses in Europe. We must therefore ensure that the markets for these different products remain competitive and that companies are free to choose the products that best meet their needs.

Margrethe Vestager, European Commissioner for Competition

It is moreover Slack, the direct competitor of Teams, which is at the first initiative of the investigation: the company had filed a complaint in 2020 against Microsoft for anti-competitive practices, by proposing in the even offers its widely leading office suite and collaboration tool.

In order to guard against any punitive measures and to appease the European regulatory authorities, Microsoft has decided to take the lead.

Microsoft removes Teams from its Office 365 suite

As of October 1, 2023, Microsoft Teams will no longer be part of the Office 365 offering for businesses in the European Union and Switzerland. Customers will be able to take advantage of a reduction of 2 euros per month or 24 euros per year on the entire suite of office software from Microsoft, but without Teams. It was this measure that had been proposed behind the scenes by Microsoft to the European Union, but the two entities had obviously not agreed on all the terms of such a change of offer.

For companies that want to use Microsoft Teams, it will be necessary to subscribe to an additional subscription for 5 euros per month or 60 euros per year. This is therefore an additional cost of 3 euros per month on the final bill. For small and medium-sized businesses, the Office 365 offer integrating Teams will still be available, with the possibility of withdrawing Teams for a lower cost.

Today, we are announcing proactive changes that we hope will begin to address these concerns in a significant way, even as the European Commission’s investigation continues and we cooperate with it.

Nanna-Louise Linde, Microsoft Europe vice president of government affairs

Microsoft also announces interoperability with competing solutions so that applications like Slack, Zoom or Salesforce can work in harmony with its communication tools (Outlook, Exchange, Teams).

Slack vs. Teams, a duel that lasts

Slack’s 2020 complaint is only part of the equation between it and Microsoft. The company’s president, Stewart Butterfield, told the media the same year The Verge : “ Microsoft may be unusually preoccupied with neutralizing us and Teams is their way of doing it “. The two tools have, so to speak, shot each other in the paws during the Covid-19 pandemic when the uses of conversations and videoconferencing were booming with the global resurgence of telework.

Microsoft Teams has become widely democratized within large companies, while Slack is being used more within start-ups and medium-sized companies. The differences between the two services are numerous: Teams focuses more on audio and video calls, in the logical continuation of Skype, and Slack on collaboration via instant messaging (even the application launched in audio then video from 2021).

We are therefore awaiting the decision of the European Commission, which will have to decide whether this Microsoft initiative restores healthy competition within the market. If this is not the case, the firm will have to face its first antitrust investigation in around fifteen years, the firm subsequently having to pay a fine of 561 million euros in 2013 for having failed to offer to users to choose their web browser in its Windows 7 operating system.