Microsoft just threw down the gauntlet on the tech industry by committing to a significant change in policy. They will no longer bundle their Teams and Office products together globally. The tech giant is currently under antitrust investigation by the European Union (EU). In some cases they are proactively addressing this by cutting harmful loopholes, easing regulatory burdens, and escaping large financial penalties.
Shifting Strategy to Address Antitrust Concerns
The shift – ostensibly to appease EU regulators – comes from an ongoing battle over Microsoft’s bundling of their lineup of products. The firm, based in hostile-environment suburbia Redmond, WA, has been rightly pilloried for its anticompetitive behavior around Teams. Competitors claim that these practices have severely restricted competition in the space. By unbundling these offerings, Microsoft wants to show that it’s serious about creating a competitive environment.
On Friday, the European Commission announced that it is evaluating Microsoft’s offer as part of its ongoing investigation into the company’s business practices. The announcement is another sign of a major turn in the antitrust issues that have bedeviled Microsoft for the past couple decades.
Salesforce’s president and chief legal officer, Sabastian Niles, shared a little bit about what Microsoft’s actions will mean for the future. He stated that this situation “further affirms that Microsoft’s anticompetitive practices with Teams have harmed competition and require a binding, enforceable, and effective remedy.” His remarks highlight just how serious the allegations against Microsoft are — and just how strong a response should be.
Salesforce hit the headlines in 2021 when it agreed to buy Slack for $27.7 billion, its biggest ever deal. Salesforce has emerged as one of the dominant forces in the collaborative software market. Its involvement makes for yet another layer for Microsoft to have to overcome in a very crowded environment.
EU’s Optimism About Microsoft’s Offer
Nanna-Louise Linde, a spokesperson for the European Commission, commented on the ongoing negotiations between Microsoft and regulators. She noted, “The proposed commitments are the result of constructive, good-faith discussions with the European Commission over several months.” Her quote highlights the serious, collaborative spirit that both sides brought to the table in attempting to remedy the concerns.
In addition, Linde said he was cautiously hopeful about the positive impact Microsoft’s offer could have. “We believe that they represent a clear and complete resolution to the concerns raised by our competitors and will provide European customers with more choices,” she added. This is not a bad thing, as it demonstrates a cautious optimism toward a compromise solution that would save consumers from the worst of it.
Meanwhile, Microsoft continues to take its play global, selling Teams and Office individually. This proposed shift is intended to ensure regulatory issues are dealt with, while still maintaining a robust competitive footprint. This action is expected to be extremely influential not just for Microsoft. It will prove pivotal for the entire tech industry as it comes under fire for many of the same issues.
What The Author Thinks
While Microsoft’s move to unbundle its products appears to be a step in the right direction for compliance, it remains to be seen how effective this will be in addressing the underlying competitive issues in the long term. The company’s continued influence on the market could still create a climate where smaller players struggle to thrive, even as the unbundling provides some temporary relief.
Featured image credit: Bridgehampton
For more stories like it, click the +Follow button at the top of this page to follow us.