The European Commission no longer seems to plan on giving Microsoft a massive fine due to the bundling of Teams and Office, even though the company gained a lasting advantage.
Europe no longer seems intent on imposing a large fine on Microsoft. The European Commission is launching a so-called market test. The aim is to investigate whether the changes Microsoft has made itself are sufficient to avert a fine. Such a test usually precedes a settlement.
The European Commission has been investigating Microsoft’s unfair competition practices regarding Teams for several years. In 2020, Slack filed a complaint, because Microsoft was giving itself an unfair advantage by bundling Teams with what was then called Office 365.
However, in 2023, Microsoft unbundled Teams from Office/Microsoft 365. There is now a price difference between Microsoft 365 with and without Teams, and Teams alone is not free either. Microsoft also claims to be working on better interoperability with competitors.
Reuters reported last week that the European Commission is willing to accept these adjustments. The reasoning appears to be that with the separation of both products, the unfair aspect has been addressed. There is no formal European response yet.
Lasting Impact
If Microsoft avoids a fine, it would be quite striking. The impact of the alleged distortion of competition is still felt today. At the time, Slack was a major player in business communication. Slack modernized the concept of chatting via Skype for Business and similar tools into an experience with groups, teams, and connections to external applications.
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Microsoft Teams came later, and Microsoft copied Slack’s concept according to its own vision. Subsequently, Microsoft integrated Teams into Office 365. Those who had a subscription could use Teams for free. This was unfortunate for Slack: although the tool was certainly better received at the time, it became harder for companies to justify the extra investment. They already had Teams. Slack quickly lost its position as market leader, and Teams took over that position.
When Microsoft split Teams and Office in 2023, the market share had already been gathered. It’s no longer necessary for Microsoft to bundle Teams and Microsoft 365, as Teams has become the biggest player. Slack has had to give in and now competes under the wings of Salesforce from an underdog position, into which it was forced through unfair practices.
If Reuters’ information is correct, the European Commission will be sending the signal that unfair competition with a lasting advantage is acceptable, as long as you stop it at some point.
This article was originally published on 15 May 2025 and was updated on 19 May 2025 with the latest information.