Microsoft Likely to Avoid EU Fine by Changing Office and Teams Offer

Microsoft may avoid a large fine from the European Union by changing how it offers its Office and Teams software. This information comes from three people familiar with the situation. The EU is expected to accept Microsoft’s offer, which could end a major investigation. This would also help reduce tension between Europe and the United States over how the EU handles big tech companies.

The case began when rival company Slack, now owned by Salesforce, filed a complaint. Slack said Microsoft made it harder for other messaging tools to compete by including Teams with Office 365. The EU started a formal investigation in July 2023 to look into these claims. If Microsoft had been found guilty, it could have faced a fine of up to 10 percent of its yearly global revenue. That would mean billions of dollars.

To solve the issue, Microsoft offered to change its product bundles. One major step was to unbundle Teams from Office 365 and Microsoft 365 for users in the European Economic Area. This means customers could choose Office without Teams at a lower price. Microsoft also offered to make it easier for rival apps to work with its systems and provide better information for developers.

The company began putting these changes in place in late 2023. In April 2024, it expanded these steps to cover more parts of Europe. These actions were seen as a positive sign by EU officials. Although the final decision is still pending, sources say regulators are likely to approve Microsoft’s offer and close the case without a fine.

This case is not the first time Microsoft has faced antitrust problems in Europe. In 2004, it was fined €497 million for bundling Windows Media Player with its operating system. In 2013, it paid another fine of €561 million for breaking an earlier agreement. Since then, Microsoft has taken a more cooperative approach with regulators.

The possible settlement may affect how other big tech companies deal with EU laws. The European Commission is also watching companies like Google, Apple, Amazon, and Meta under the new Digital Markets Act. This law is meant to stop big companies from using their size to block competition.

By solving this case, Microsoft can focus more on its business in Europe. The company is growing its cloud services, artificial intelligence tools, and data centers in the region. Recent plans include new investments in countries like Germany, France, and the Netherlands.

If the EU accepts Microsoft’s offer, it will likely be seen as a sign that large tech companies can avoid harsh penalties by working with regulators early. The final decision from the EU is expected in the coming months.