Microsoft proposes sweeping global concessions to Teams for up to a decade

Microsoft is offering to make a series of concessions for up to ten years to pacify European Commission antitrust regulators. This follows protests from users that tying Teams with its biz productivity applications hinders competition.

The executive body of the EU confirmed today it is seeking feedback on those modificaitons proposed by the US cloud and software corporation.

Under the commitments proposed, the EC says Microsoft would make versions of Teams with Office 365 and Microsoft 365 available at a "reduced price"; let customers buy the suites without Teams, including those within existing contract frameworks; give rivals better interoperability with other Microsoft software; and allow clients to move data out of Teams to "facilitate the use of competition solutions."

This comes almost five years after Slack general counsel David Schellhase grumbled to the EC that Microsoft was "reverting to past behavior," adding: "They created a weak, copycat product and tied it to their dominant Office product, force installing it and blocking its removal, a carbon copy of their illegal behavior during the 'browser wars'."

He called on the EC to "take swift action," and here we are, half a decade later, with Microsoft making further concessions to deflect the real threat that something actually might be done by the competition police, at some point in the near future.

Microsoft already unbundled Teams from the productivity suites in 2023 across the EU - and then globally - after the EC opened a formal investigation and found Microsoft was a dominant player in SaaS productivity applications used by businesses, and that tying Teams to Office since April 2019 breached Article 102 of the Treaty on the Functioning of the European Union (TFEU) and Article 54 of the Agreement on the European Economic Area.

This, the EC determined, restricted competition in the market for unified comms and collaboration software, compounded by interoperability limitations between Teams and its competitor products, and helped Microsoft defend its dominance in productivity software.

In response to mounting pressure, Microsoft began selling Office minus Teams for €2 less than Office with Teams in 2023. A standalone version of Teams was offered for €5 a month. Earlier this year it made further tweaks, widening the price difference to appease rivals.

The EC said today that the changes to the way Microsoft distributed Team were "insufficient to address its concerns and that more changes to Microsoft's conduct were necessary to restore competition effectively."

The latest proposed remedies "build on Microsoft's previous unilateral changes," the EC said. It listed Microsoft’s concessions:

• To offer customers purchasing in the EEA versions of its Office 365 and Microsoft 365 suites without Teams and do so at a lower price than the one for corresponding suites that include Teams. In addition, Microsoft committed not to offer discount rates on Teams or on suites including Teams higher than those offered for suites without Teams.
• To afford customers purchasing in the EEA recurrent opportunities to switch to suites without Teams and allow for such suites to be deployed in datacentres worldwide.
• To allow Teams' competitors and certain third parties (i) access to and effective interoperability with identified Microsoft products and services for specific functionalities, as well as (ii) to embed Office Web Applications (Word, Excel, and PowerPoint) in their own products, and to (iii) prominently integrate their products in Microsoft's core productivity applications.
• To allow customers in the EEA to extract their Teams messaging data for use in competing solutions.

Furthermore, Microsoft has agreed that if the commitments are binding, then "it will align its worldwide suites offers and pricing with the commitments."

"The commitments offered by Microsoft would remain in force for seven years, except for interoperability and data portability obligations which would remain in force for ten years.

• Microsoft boots 3% of staff in latest cull, middle managers first in line
• Microsoft blows deadline for special Azure for EU hosters
• Microsoft: So what if it costs 4X as much to run Windows Server in AWS, Alibaba, and Google?
• Google files first ever complaint with European Commission against Microsoft

"The implementation of the commitments would be monitored by a monitoring trustee, who will also mediate in case of disputes between third parties and Microsoft. If a third party concern persists, the dispute will be subject to fast-track arbitration. The monitoring trustee will also report regularly to the Commission."

The EC is seeking comments from interested parties, who can submit their responses on its competition website one month after the publication of a summary of the proposed commitments in the EU's Official Journal.

Nanna-Louise Linde, Vice President, European Government Affairs at Microsoft, said in a statement sent to The Register, that its proposal "represent[s] a clear and complete resolution to the concerns raised by our competitors and will provide European customers with more choices."

Teams has more than 320 million active monthly users worldwide, versus just 65 million estimated at Slack, which is now owned by Salesforce. Some - including a former Google exec - might say the damage has already been done. ®