European Commission Clears Microsoft After Teams Unbundling Commitment
The European Commission has concluded its extensive antitrust investigation into Microsoft’s bundling of its corporate messaging app Teams with its Office productivity suites, accepting the tech giant’s commitments to unbundle the app and enhance competition.
The probe, initiated in 2020 following complaints from Slack and Alfaview, focused on whether Microsoft abused its dominant market position by integrating Teams with Microsoft 365 and Office 365, offering it free alongside other productivity tools such as Excel, Outlook, SharePoint, and Word.
Key Concessions to Promote Competition
Microsoft has pledged to provide versions of Microsoft 365 and Office 365 without Teams at a 50% reduced price for the next seven years. Customers will have the option to add Teams separately for an additional cost. Furthermore, Microsoft committed to opening its application programming interfaces (APIs) for five years to facilitate interoperability between Teams and third-party collaboration tools, allowing competitors to export data out of Teams.
These concessions follow an earlier partial unbundling effort in April 2024, which the Commission deemed insufficient, prompting Microsoft to submit a revised plan in May 2025.
Outcomes and Industry Implications
The resolution allows Microsoft to avoid substantial fines, which under EU rules could have been as high as 10% of its global annual revenue—potentially billions of dollars given its $245 billion revenue in the previous year.
Significantly, Slack and Alfaview have withdrawn their complaints after a market test conducted by the Commission, suggesting the commitments adequately address competitive concerns.
Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition at the European Commission, emphasized the importance of the decision: “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. Today’s decision therefore opens up competition in this crucial market, and ensures that businesses can freely choose the communication and collaboration product that best suits their needs.”
Looking Ahead
The agreement sets a precedent for regulatory engagement with Big Tech on software bundling and interoperability. The coming years will reveal how effectively Microsoft’s commitments foster a more competitive environment in corporate collaboration tools.
FinOracleAI — Market View
The European Commission’s acceptance of Microsoft’s concessions mitigates immediate regulatory risks and avoids costly fines, providing a positive near-term outlook for the company’s stock. By offering Teams-free versions at a lower price and opening APIs, Microsoft addresses key competitive concerns, potentially stabilizing its market position in productivity software. However, the long-term impact depends on how rivals leverage enhanced interoperability and whether Microsoft maintains competitive pricing and innovation. Investors should monitor adoption rates of Teams alternatives and any evolving regulatory developments in the EU.
Impact: positive
