US technology giant Microsoft is to carve up its Microsoft 365 and Office 365 suite of products over an ongoing European Union anti-trust probe, the company said.
It is set to split its Microsoft Teams service from the rest of the 365 suite, which includes well-known programmes such as Word, PowerPoint and Excel, in response to the investigation, which was prompted by a complaint from US business rival Salesforce, of which its subsidiary Slack Technologies is a Teams competitor.
Having last year announced that Teams would be offered separately from Office within the European Economic Area (EEA), Microsoft has now confirmed it will split the services globally.
“To ensure clarity for our customers, we are extending the steps we took last year to unbundle Teams from [Microsoft] 365 and [Office] 365 in the EEA and Switzerland to customers globally,” a company representative said.
“Doing so also addresses feedback from the European Commission by providing multinational companies more flexibility when they want to standardise their purchasing across geographies.”
The announcement follows the EC’s decision to launch an anti-trust investigation into Microsoft last year over the software bundle.
According to the EC, it is concerned that the tech giant’s decision to bundle Teams into the 365 suites may constitute it “abusing and defending its market position in productivity software by restricting competition in the European Economic Area for communication and collaboration products”.
“Remote communication and collaboration tools like Teams have become indispensable for many businesses in Europe,” Commission Vice-President Margrethe Vestager said last year.
“We must therefore ensure that the markets for these products remain competitive and companies are free to choose the products that best meet their needs.
“This is why we are investigating whether Microsoft’s tying of its productivity suites with Teams may be in breach of EU competition rules,” she concluded.
Microsoft’s financial backing for ChatGPT maker OpenAI may be subject to EU merger rules, EU antitrust regulators said on Tuesday. https://t.co/k5ONH7yQhb
— Brussels Signal (@brusselssignal) January 10, 2024
The EC’s investigation came in response to a formal complaint by Salesforce that Microsoft’s bundling of the software with other more popular products was damaging the European market.
“We’re confident that we win on the merits of our product but we can’t ignore illegal behaviour that deprives customers of access to the tools and solutions they want,” Jonathan Prince, the then-Communications Vice-President at Slack, said after the company made the 2020 complaint.
Slack claimed Microsoft’s bundling of all its business software prevented small companies from offering bespoke solutions, saying Microsoft’s approach required businesses to allocate almost all of their commercial budget towards Microsoft’s 365 product suite.
That, it said, prevented enterprises from picking and choosing different products based on what they needed.
“Slack threatens Microsoft’s hold on business email, the cornerstone of Office, which means Slack threatens Microsoft’s lock on enterprise software,” Prince said.
“We want to be the 2 per cent of your software budget that makes the other 98 per cent more valuable; they [Microsoft] want 100 per cent of your budget every time,” he claimed.
The European Commission is “actively investigating” possible cases of cartel activity within the “cloud computing” market with @dreynders revealing it is looking into Microsoft, among others, for possible breaches of competition rules. https://t.co/Rb9nNS2anw
— Brussels Signal (@brusselssignal) December 12, 2023
