Microsoft’s Strategic Unbundling: Teams to be Sold Separately from Office amid $2.4bn EU Antitrust Lawsuit

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EU could potentially fine Microsoft $2.4bn, as the company plans to separate Teams and Office due to an existing antitrust lawsuit

Microsoft, currently dealing with several antitrust lawsuits and already burdened with a $2.4 billion penalty, may incur additional fines. To prevent this, the corporation has chosen to offer its Teams applications independently from its Office suite.

Microsoft has declared its plans to globally sell its chat and video application, Teams, independently from its Office product. This decision comes half a year after it detached the two products in Europe in response to possible EU antitrust issues.

The European Commission has been probing into Microsoft's packaging of Office and Teams since 2020 after Slack, a competitor workspace communication application owned by Salesforce, lodged a complaint.

The feature Teams, which was first introduced to Office 365 at no extra cost in 2017, has seen a surge in popularity, especially during the pandemic. This is due to its video conferencing functionality, which took over from Skype for Business.

Opponents contended that Microsoft's strategy of packaging their products gave them an undue edge. As a result, Microsoft began offering Office and Teams as individual products in the European Union and Switzerland from August 31 of the previous year.

Microsoft has chosen to globally expand the unbundling, as per a company representative, to address customer opinions and offer more buying flexibility to international corporations.

Microsoft is rolling out changes that include launching new global commercial versions of Microsoft 365 and Office 365 that do not feature Teams. Furthermore, a separate Teams package for Enterprise clients will be accessible in areas beyond the European Economic Area (EEA) and Switzerland.

Starting from April 1, clients have the choice to either stick with their existing license agreements or transition to the new options.

The cost for new business clients for Office excluding Teams will range from $7.75 to $54.75. On the other hand, Teams as a separate service will be priced at $5.25. The pricing could differ by nation and currency.

Even though Microsoft has tried to tackle antitrust issues, their actions may not be enough to evade possible accusations from the EU. Competitors have raised complaints about the costs and the interoperability of their messaging services with Office Web Applications.

Microsoft, which has already paid 2.2 billion Euros in EU antitrust penalties over the last ten years for package deals, might be slapped with penalties amounting to 10% of its worldwide yearly revenue if it's found guilty of breaking antitrust laws.

(Sourced from various agencies)

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