Short answer: Microsoft is no longer merely “at risk” of a huge European Union fine over Teams and Office bundling. On September 12, 2025, the European Commission accepted legally binding commitments from Microsoft, ending the investigation without imposing a monetary penalty. Microsoft must continue offering covered business versions of Office and Microsoft 365 without Teams, at a lower price, while meeting specified interoperability and data-portability obligations.
The original headline dates from 2024, when the Commission issued a preliminary Statement of Objections. It was not a final finding that Microsoft had broken competition law. The settlement still matters for companies comparing Microsoft licensing costs with Slack, Zoom, Google Workspace, or other collaboration platforms.
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What Microsoft was accused of doing
The European Commission investigated whether Microsoft used its strong position in business productivity software to give Teams an unfair advantage over rival collaboration services.
The concern centered on bundling and tying. Microsoft included Teams in certain Office 365 and Microsoft 365 business suites that customers bought for email, documents, spreadsheets, storage, identity, and administration. Regulators questioned whether customers could obtain the productivity software they needed without also taking Teams, or whether the pricing and design of the offers made Teams effectively unavoidable.
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Bundling is not automatically illegal. A bundle can be convenient, better integrated, or cheaper than buying products separately. The competition issue was whether a company with a powerful position in one market used that position to restrict competition in a separate communications and collaboration market.
The Commission’s formal investigation announcement is available in its July 2023 investigation notice.
Why Teams was commercially powerful
Teams was not competing only as a standalone chat or meeting application. It was connected to products and services many organizations already used:
- Outlook calendars and email;
- Microsoft Entra identity and administration;
- SharePoint and OneDrive files;
- Microsoft 365 compliance, security, and retention controls;
- Office documents and organizational workflows.
That integration can be valuable to customers. It can also make switching harder. An organization choosing Slack, Zoom, Google Meet, or Webex might still need Microsoft software for documents, email, identity, or compliance. The Commission’s preliminary theory was that Microsoft could leverage that productivity-software position to distribute Teams more widely than an independent rival could.
How the case began
- July 2020: Salesforce-owned Slack complained to the European Commission. Slack argued that Microsoft was using Office’s popularity to distribute Teams and disadvantage independent collaboration providers. Those were Slack’s allegations, not a final legal finding.
- July 2023: The Commission opened a formal investigation into Microsoft’s licensing, bundling, and interoperability practices.
- June 25, 2024: The Commission issued a Statement of Objections. This was a preliminary assessment, not a conviction or final infringement decision.
- September 12, 2025: The Commission accepted Microsoft’s legally binding commitments and closed the investigation through a commitments decision.
- November 1, 2025: Microsoft’s principal global licensing changes took effect, subject to product, customer, geography, contract, and channel conditions.
The Commission’s preliminary concerns and procedural history are recorded in the EUR-Lex notice.
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How large could the fine have been?
EU competition rules can allow a fine of up to 10% of a company’s worldwide annual turnover for a serious infringement. That figure is a statutory ceiling, not an automatic charge and not a forecast of what Microsoft would have paid.
An actual fine would depend on factors such as the seriousness and duration of the conduct, affected revenue, cooperation, and the Commission’s assessment of the case. The relevant legal framework is set out in Article 23 of Regulation 1/2003.
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What Microsoft agreed to do
Microsoft’s commitments address both customer choice and the ability of rival services to compete. The main measures include:
- Teams-free suites: Covered business customers can buy corresponding Office 365 and Microsoft 365 suites without Teams.
- Lower pricing: The Teams-free versions must be priced below the corresponding versions that include Teams.
- Minimum price differences: Microsoft committed to minimum price deltas between relevant versions.
- Standalone Teams pricing: Certain standalone Teams products are subject to minimum-price requirements tied to the separation arrangements.
- Interoperability: Microsoft must provide specified access and functionality intended to help competing collaboration products work with Microsoft services.
- Data portability: The commitments include measures intended to make it easier for customers to retrieve and move relevant data.
- Office web applications: Rivals receive rights to embed Office web applications in specified circumstances.
The price-delta requirements are described as lasting for seven years. The Commission’s commitment decision summary and Microsoft’s commitments page provide the formal details.
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What business customers can buy
For covered commercial plans, a customer can generally compare three approaches:
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- Buy a corresponding suite without Teams.
- Buy the Teams-free productivity suite and add standalone Teams—or use another collaboration platform such as Slack, Zoom, Google Workspace, or Webex.
Microsoft published the following minimum U.S.-dollar price differences for relevant product groups:
| Product group | Minimum difference between versions with and without Teams |
|---|---|
| Microsoft 365 E3/E5 and Office 365 E3/E5 | $8.55 |
| Microsoft 365 Business Standard/Premium and Office 365 E1 | $3.21 |
| Microsoft 365 Business Basic | $1.60–$1.61 |
| Microsoft 365 F3 | $1.07 |
| Teams Enterprise / Teams EEA standalone minimum | $8.55 |
| Teams Essentials standalone minimum | $3.21 |
These are published U.S.-dollar minimums, not guaranteed transaction prices. Currency conversion, tax, geography, reseller discounts, billing terms, enterprise agreements, customer type, and renewal timing can change the amount. Microsoft’s licensing update and licensing FAQ should be checked before a procurement decision.
What changed in 2026?
Microsoft separately changed selected commercial Microsoft 365 packaging and pricing effective July 1, 2026. That update should not be confused with the EU Teams investigation or its settlement.
Microsoft’s published examples include Office 365 E3 with Teams at $26 per user per month and without Teams at $17.45, and Microsoft 365 E3 with Teams at $39 and without Teams at $30.45. These are commercial list-price examples, not universal prices. Existing customers generally remain on their current pricing until renewal, depending on their contract and licensing channel.
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Microsoft said standalone Teams and Copilot SKUs were not included in that particular 2026 update. See the company’s 2026 pricing announcement and FAQ for current plan-specific terms.
What this means for a company’s total software bill
The headline saving from removing Teams is only one part of the calculation. A company considering a Teams-free plan should review:
- How many employees actively use Teams chat, meetings, calling, or channels;
- whether Outlook, SharePoint, OneDrive, identity, security, and compliance features remain necessary;
- the price of a replacement service and any duplicate meeting or storage features;
- migration costs for chats, files, recordings, workflows, and integrations;
- data retention, e-discovery, backup, and regulatory requirements;
- the organization’s enterprise agreement, CSP arrangement, renewal date, and currency;
- training, support, administration, and endpoint-management costs.
A Teams-free license does not automatically remove Teams from a tenant or migrate an organization’s data. It separates the licensing choice from the technical and operational work of changing collaboration platforms.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the settlement means for Slack, Zoom, Google, and Webex
The remedy removes or reduces one distribution advantage: customers can continue buying Microsoft productivity software without automatically buying Teams. That may make it easier for rivals to compete for collaboration workloads.
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For a competing platform, the practical opportunity is strongest where customers want Microsoft Office but prefer another service for messaging, meetings, calling, or cross-company collaboration. The practical challenge is that replacing Teams may still require significant migration and governance work.
Is the EU case still open?
No. The European Commission accepted Microsoft’s commitments on September 12, 2025, resolving the Teams-bundling investigation without a fine.
Microsoft is nevertheless subject to the accepted obligations, and regulators can respond if commitments are not honored. Separately, the UK Competition and Markets Authority opened a strategic market-status investigation into Microsoft’s business-software ecosystem on May 14, 2026. That is a distinct UK process—not a continuation of the concluded EU Teams case—and it is not a final finding or fine. The CMA’s case page is available at GOV.UK.
Common mistakes in reading the headline
- “Microsoft was fined 10%.” False for this case. Ten percent was a possible legal maximum, and no fine was imposed.
- “The Commission convicted Microsoft in 2024.” Incorrect. The Statement of Objections was preliminary.
- “Teams was free.” Oversimplified. Teams was included in broader paid business suites; the dispute concerned pricing, distribution, and customer choice.
- “The settlement applies identically everywhere.” Too broad. Product, geography, currency, contract, customer type, and sales channel matter.
- “A Teams-free plan removes Teams.” Not necessarily. Licensing separation does not automatically uninstall software or migrate data.
- “The UK is also fining Microsoft.” Unsupported. The UK investigation is separate and ongoing based on the supplied evidence.
The Bottom Line
Bottom line: Microsoft avoided the threatened EU Teams fine, but it did not simply walk away. The company accepted binding seven-year commitments requiring Teams-free business suites, lower separated pricing, and specified interoperability and data-portability measures. For customers, the key question is no longer whether Teams can be separated from Office—it generally can for covered commercial plans—but whether the license saving outweighs the cost of changing collaboration tools and managing a more complex software environment.
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