Microsoft agreed to sell separate Office 365 packages without Teams for a significantly lower price than before, ending a more than five-year dispute between the European Union and Slack and avoiding a fine from the EU.
The software giant was accused of EU antitrust violations in June 2024 to bundle Teams with subscriptions to Office 365 and Microsoft 365. The dispute began in July 2020, when Slack (now owned by Salesforce) filed an official complaint, alleging that Microsoft was engaging in an “illegal and anticompetitive practice of abusing its market dominance” by tying Teams “to its market-dominating Office productivity suite,” according to a Slack news blog post.
Microsoft must comply with the EU agreement for at least seven years, or face sanctions. EU competition chief Teresa Ribera said The agreement “opens up competition in this crucial market and ensures that companies can freely choose the communication and collaboration product that best suits their needs.”
The Microsoft deal should result in significant cost savings for Office/Microsoft 365 customers. The price difference between suites with Teams and those without will be reduced by an additional 50%. The price reductions will occur in the EU, but could possibly extend to the entire world.
Other changes will include:
- Customers with long-term licenses can downgrade to licenses that don’t include Teams.
- Teams competitors (like Slack, Google Meet, and Zoom) will have interoperability with Office software like Word and Excel.
- Customers can move their data out of Teams if they want to switch to a different communications platform.
The EU’s announcement “sends a clear message: Microsoft’s anticompetitive tying of Teams has harmed businesses, denied customers fair choices, and resulted in many years of lost competition,” Salesforce Chief Legal Officer Sabastian Niles said in a statement Friday.
Slack won’t hurt Teams much in terms of market share, he said Anurag Ranasector head and senior analyst at Bloomberg Intelligence. “Most companies have established software tools that they are using internally right now, and we don’t expect them to switch vendors because of lower prices or any other incentives that rivals may offer,” Rana told CNET. “This is not specialized software and most applications now have comparable features.”
In 2024, Teams had five times more monthly users like Slack and brought 8 billion dollars in revenueabout double what Slack is expected to generate this year.