Beginning on Oct. 1 of this year, European Economic Area and Swiss regions will receive Microsoft packages without Teams included, resulting in a 24 euro ($26) annual price reduction. This change was prompted by the European Union's antitrust inquiry into Microsoft's combination of Teams with other Office products, over worries of unfair competition.
Microsoft announced on Thursday that it would be separating its chat and videoconferencing service Teams from its Microsoft 365 suite in the European Economic Area (EEA) and Swiss regions, in order to address the European Union's antitrust concerns. This will be effective as of October 1, and current subscribers who have Teams will be offered the discounted package without the app at a rate 24 euros ($26) less per year.
Previously, Teams was a highly valued component of Microsoft 365 (formerly Office 365), which also includes Word and Excel. It gained in popularity during the Covid-19 pandemic as it facilitated work communication through its video and text. MS has also stated its plans to offer an upgraded version of Teams that functions twice as fast.
In July 2020, EU regulators commenced an antitrust investigation into the bundling of Teams with other Office products, following a complaint from Slack, which is owned by Salesforce. The primary concern was that Microsoft may be giving Teams an unfair advantage in distribution by not giving customers the option to either include or omit the app in their MS 365 subscription.
In response, Microsoft has said it will beef up its interoperability with Microsoft 365 and Office 365, and create methods to accommodate Office web applications within other services or apps..
Nanna-Louise Linde, vice president of Microsoft European Government Affairs, noted in a blog post on Thursday that "clarity has emerged on several of the concerns from extensive and constructive discussions with the European Commission," adding that Microsoft believes it is important to now take "meaningful steps to address those concerns" which she stated balance the interests of competitors with those of European business customers. Linde went on to recognize that the EU investigation is still in its early stages. An EU spokesperson stated to CNBC "We take note of Microsoft's announcement. We have no further comment to make." Additionally, Microsoft is currently facing scrutiny from U.K. regulators over its original plans to acquire gaming company Activision Blizzard, which was blocked on competition concerns in the cloud gaming market. Microsoft recently submitted a new deal proposal for this purchase, accompanied by concessions, which the U.K.'s Competition and Markets Authority is now assessing, with a decision deadline of October 18th. CNBC's Silvia Amaro contributed to this report.
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