Microsoft to adjust Office-Teams pricing in bid to avoid EU antitrust fine, sources say

Microsoft has offered to widen the price differential between its Office product sold with its chat and video app Teams and its software sold without the app in a bid to avert a possible EU antitrust fine, according to three sources.

The move by the U.S. tech giant comes five years after Salesforce-owned Slack complained to the European Commission about Microsoft's tying of Teams with Office. In 2023, German rival alfaview filed a similar grievance to the EU watchdog.

Teams, which was added to Office 365 in 2017 for free and eventually replaced Skype for Business, became popular during the pandemic due in part to its video conferencing.

Microsoft plans to spend $80 billion on AI-enabled data centers in fiscal 2025

Making Office with Teams more expensive could help rivals offer their products at competitive prices and entice users to switch to them.

Microsoft unbundled Teams from Office in 2023, selling Office without Teams for 2 euros less than Office with the video app. It said Teams standalone would be sold for 5 euros a month.

The Commission has asked some companies for feedback, giving them until this week to respond, before it decides whether to do a formal market test, said the three people, all with direct knowledge of the matter.

They said Microsoft has also offered better interoperability terms to make it easier for rivals to compete.

The EU competition enforcer and Microsoft, which racked up 2.2 billion euros ($2.3 billion) in EU antitrust fines two decades ago for tying or bundling two or more products together, declined to comment. EU fines can reach 10% of a company's global annual revenue.

If the Commission does accept Microsoft's offer without a fine or a finding of wrongdoing, it would free up manpower and resources for its investigations into Apple and Google, one of the sources said.