Microsoft Ends Legal Dispute Over Teams and Announces Changes.
In 2023, an impending legal dispute with the European Competition Authority meant that certain Microsoft 365 license bundles could only be purchased without Teams. Those who wanted to continue using Microsoft Teams had to purchase a separate Microsoft Teams EEA license. Microsoft has now settled the dispute by making a further concession. From November 1, Microsoft Teams will no longer require a separate license. In this blog, we explore this development and explain the changes it will bring.
#Microsoft #Microsoft 365 #Microsoft Teams #Modern Work
The cause of the dispute
An official complaint filed by Slack with the European Commission triggered the legal dispute[1]. The European Commission responded to this complaint and accused Microsoft of abusing its market power by bundling Teams with Microsoft 365[2]. The criticism focused on so-called forced bundling: Microsoft Teams was automatically installed in combination with Office, which meant that customers had no option to purchase the software package without Teams. This gave Microsoft a significant competitive advantage, as many companies already had Office licenses and were therefore able to use Teams preferentially. In addition, interoperability issues were highlighted because Microsoft allegedly favored its own interfaces, making it difficult to integrate competing solutions. Overall, the EU Commission saw these practices as a threat to competition, inhibiting innovation and distorting the market for collaboration tools.
To avoid a legal dispute, Microsoft removed Teams from its enterprise license bundles in October 2023[3]. Existing license bundles and business licenses were not affected by this change. The change took effect in October for the EU (including Switzerland) and in April 2024 for remaining countries.
Microsoft's concessions
Microsoft has announced further concessions, which have been accepted by the EU Commission[4]. This has allowed formal antitrust proceedings to be averted. To address the EU's competition concerns, Microsoft has committed to the following changes, which will take effect on November 1[5]:
- All Microsoft 365 packages can be purchased with or without Microsoft Teams.
- The price difference between Microsoft 365 packages with and without Teams will increase. This will result in new prices for licenses.
- Microsoft Teams can still be purchased as a standalone solution. New prices will also apply here.
- Microsoft provides APIs that enable interoperability with other products. This allows other collaboration tools, such as Slack, to access information in Exchange Online, SharePoint, or even presence status.
Mostly positive effects for customers!
What do these concessions mean for end customers in concrete terms? They will result in mostly positive changes! New Microsoft 365 customers had to license Teams separately due to the interim solution. This will no longer be necessary from November onwards. We recommend that affected customers consider consolidating their licences. This not only simplifies the purchase, but also the allocation of the licence, which, however, requires an adjustment of the group-based licensing configuration.
Due to the concessions, Microsoft is also forced to make a price adjustment. Surprisingly, Microsoft has lowered the prices of Microsoft 365 bundles without Teams in order to create the necessary price difference between these bundles and those with Teams. This is very good news for end customers. An overview of the specific changes:
- All Microsoft 365 and Office 365 bundles without Teams (EEA) will be 5-20% cheaper
- The prices of Microsoft 365 and Office 365 bundles with Teams will remain the same
- Teams Standalone (EEA), on the other hand, will become a whopping 60% more expensive.
These price adjustments will take effect after 1 November 2025 for new purchases or renewals of affected licences.
Our recommendations
Check your current licensing. If you have separate Teams EEA licences, these should be consolidated at the earliest opportunity. If you also have Microsoft 365 E3 licences that are due for renewal in October, it may be worth switching to monthly licences so that you can purchase annual licences again at a lower price in November.
Talk to your trusted Microsoft 365 partner. We look forward to hearing from you.
[1] Slack Files EU Competition Complaint Against Microsoft | Slack
[2] Commission opens investigation of practices by Microsoft
[3] Microsoft announces changes to Microsoft 365 and Office 365 to address European competition concerns
[4] Commission accepts commitments offered by Microsoft to address competition concerns related to Teams
[5]Evolving our productivity offerings to resolve Microsoft Teams concerns| Microsoft 365 Blog
Your contacts
