Microsoft announces changes to Microsoft 365 and Office 365 to address European competition concerns

| Nanna-Louise Linde, Vice President, Microsoft European Government Affairs

A group of people in a meeting using Microsoft Teams

Last month, the European Commission announced that it had opened a formal investigation regarding Microsoft’s bundling of Microsoft Teams with Microsoft 365 and Office 365 suites for business customers. As we said at the time, “we will continue to cooperate with the Commission and remain committed to finding solutions that will address its concerns.”

Today we are announcing proactive changes that we hope will start to address these concerns in a meaningful way, even while the European Commission’s investigation continues and we cooperate with it. These changes will impact our Microsoft 365 and Office 365 suites for business customers in the European Economic Area and Switzerland. They are designed to address two concerns that are central to the Commission’s investigation: (1) that customers should be able to choose a business suite without Teams at a price less than those with Teams included; and (2) that we should do more to make interoperability easier between rival communication and collaboration solutions and Microsoft 365 and Office 365 suites.

Before offering more details, let me provide some added context. We believe that business customers in Europe and around the world expect a modern work solution to include modern communication and collaboration capabilities. That’s why, for more than a decade, we have included these capabilities in our business suites, starting with Office Communicator in 2007 and evolving and innovating over the years through Lync, Skype for Business Online, and most recently Microsoft Teams.

At the same time, we recognize our responsibility as a major technology provider to support a healthy competitive environment. We appreciate the clarity that has emerged on several of the concerns from extensive and constructive discussions with the European Commission. With the benefit of this clarity, we believe it is important that we start to take meaningful steps to address those concerns. We do this not with the sense that this will necessarily resolve all concerns, whether from the Commission or our competitors, but we believe this is a constructive step that can start to lead to immediate and meaningful changes in the market.

Accordingly, we plan to take the following steps in the coming months.

  • First, beginning October 1, 2023, we will unbundle Teams from our Microsoft 365 and Office 365 suites in the EEA and Switzerland. We will instead simply sell these offerings without Teams at a lower price (€2 less per month or €24 per year). We will do this for our core enterprise customers, which represent most of our commercial business in the EEA and Switzerland. Teams will still be available for new enterprise customers to buy standalone and separately at a list price of €5 per month or €60 per year. Existing enterprise customers who already have a suite with Teams can choose to stay with their current productivity suite or to move to a without-Teams suite. For our small business and frontline workers, we will keep offering suites with Teams but will at the same time offer a “without-Teams” option, and this latter version will be offered at a lower price. More details are available here.
  • Second, we will enhance our existing resources on interoperability with Microsoft 365 and Office 365. Today, we offer extensive interoperability with Microsoft 365 and Office 365 apps and services. This work allows companies like Zoom and Salesforce to create tailored and integrated experiences across Exchange, Outlook and even Teams. However, as part of the investigation process, we have heard feedback that, given the broad capabilities of Microsoft 365, Microsoft could do more in terms of providing support and making development easier. To help address these concerns, we will create new support resources to better organize and point application developers to the existing and publicly available application programming interfaces (APIs) and extensibility in Microsoft 365 and Office 365 apps and services that connect with Teams. This will include new support resources to help address questions from customers and independent software vendors (ISVs), including providing additional content to explain how data can be removed from Teams and used in another solution.
  • Finally, we will create new mechanisms to enable third-party solutions to host Office web applications. While Microsoft Office file formats are documented so that any program can open, edit, and display documents created in programs like Word, Excel, and PowerPoint, we have heard requests from competitors of Teams that they would like to rely on Microsoft’s functionality instead of building their own. To address these requests, we will develop a new method for hosting the Office web applications within competing apps and services much like Microsoft accomplishes in Teams.

We believe these changes balance the interests of our competitors with those of European business customers, providing them with access to the best possible solutions at competitive prices. We also recognize that we are still in the early stages of the European Commission’s formal investigation. We will continue to engage with the Commission, listen to concerns in the marketplace, and remain open to exploring pragmatic solutions that benefit both customers and developers in Europe.

Tags: , , ,