Microsoft sidesteps hefty EU fine with Teams unbundling deal

The European Union on Friday said it has accepted commitments from Microsoft to unbundle its Teams workplace communication platform from its popular productivity apps.

The decision essentially exempts Microsoft from receiving a potentially hefty antitrust fine after the company was last year accused by the European Commission — the executive body of the EU — of breaching competition rules with the "abusive" bundling of its Teams and Office products.

"With today's decision, we make binding for seven years or more Microsoft's commitments to put an end to its tying practices that may be preventing rivals from effectively competing with Teams," Teresa Ribera, executive vice-president for clean, just and competitive transition, said in a statement.

Under the commitments, which Microsoft first unveiled in May, the U.S. software giant will make versions of its Office 365 and Microsoft 365 software suites available at a reduced price without Teams, as well as allow customers with long-term licenses to switch to suites without Teams.

The company will also provide interoperability between tools that compete with Teams and certain Microsoft products and allow clients to move data out of Teams to competing products.

Microsoft has subsequently also offered to make further commitments to resolve its competition concerns after the European Commission market-tested the firm's initial pledges.

They included increasing the price difference between some Microsoft 365 and Office 365 suites without Teams and those with Teams by 50% and clarifying that Microsoft websites advertising a suite with Teams should display the corresponding offer without it.

"We appreciate the dialogue with the Commission that led to this agreement, and we turn now to implementing these new obligations promptly and fully," Nanna-Louise Linde, vice president of European government affairs, said in a statement Friday.

The EU first opened an antitrust investigation into Microsoft in July 2023 following a complaint by Salesforce-owned Slack, which has a rival chat service to Teams. Slack was acquired by Salesforce for $27.7 billion in 2021.

Slack was not immediately available for comment when contacted by CNBC.