The European Commission said Microsoft had offered to unbundle Teams from Office 365 and increase interoperability, as the regulator moved toward settling its competition concerns with the software giant.

A settlement would avoid a potentially heavy fine for Microsoft of up to 10 percent of its global turnover.

Microsoft had earlier unbundled Teams from Office after a complaint in 2020 by workplace collaboration software maker Slack, now part of Salesforce, but competitors said its moves were too narrow in scope.

Bundling practices

Germany’s Alfaview had also complained.

The new concessions include continuing to offer the two products separately for seven years and allowing interoperability concessions for 10 years.

Microsoft said the proposal would allow Europeans to buy the Office 365 and Microsoft 365 suites without Teams for a lower price than suites including Teams, with a maximum price differential of 8 euros (£6.70).

The proposed concessions would also allow competitors to embed Office web applications such as Word, Excel and PowerPoint into their own products and to integrate their products in Microsoft’s productivity applications.

European customers would be able to extract their Teams messaging data for migration to competing products, and Microsoft offered to embed a “Zoom” button in the menu bar of Outlook.

The Commission said it would launch what is known as a market test, involving seeking feedback from Microsoft’s competitors and customers in the coming months before making a decision.

Market tests are often a precursor to a settlement.

Customer feedback

Microsoft said the offers were “the result of constructive, good-faith discussions” with the Commission over the past several months and argued they represent a “clear and complete resolution” to competitors’ concerns.

Salesforce said it would carefully scrutinise the proposals.

Sebastian Niles, Salesforce’s chief legal officer, said the planned market test showed that Microsoft’s practices had harmed competition and required a “binding, enforceable and effective remedy”.

Microsoft faces another potential investigation in the EU after a cloud-related complaint from Google, while the UK’s Competition and Markets Authority said it was also looking into Microsoft’s strong cloud position in the UK cloud market.