No more Teams huddle? European Commission accepts commitments from Microsoft on tying
On 12 September 2025, the European Commission accepted commitments from Microsoft regarding concerns that, since at least April 2019, its tying of Teams to its online applications for Word, Excel, PowerPoint, and Outlook constituted an abuse of dominance. This expands the scope of competition issues in cloud computing to include software as a service.
Background
Long gone are the days of software delivered by way of floppy disks, CD-ROMs, or even online downloads. A large proportion of software is now hosted by providers online in the cloud, and accessed by users through subscriptions to the service – this model is known as ‘software as a service’ or ‘SaaS’. This can be contrasted with Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) (on which, see our article on Ofcom’s cloud computing study here).
Microsoft now uses the SaaS model to host a number of its key software services, including Word, Excel, PowerPoint and Outlook. Access to these is delivered by way of a range of software ‘suites’, priced at different price points depending on the combination of software included in the suite.
Microsoft Teams, a workplace collaboration application, was included in its Office 365 suite and Microsoft 365 suite, which were widely purchased by business customers. Teams is integrated with a number of other software products sold by Microsoft which form part of these bundles. This led to concerns that Microsoft was giving Teams an unfair advantage over rival products sold by competitors, as raised in complaints to the Commission by German company alfaview and US company Slack.
The Commission launched formal proceedings against Microsoft in July 2023, following which Microsoft announced a number of changes, including unbundling Teams from its suites and selling it separately, and creating new mechanisms to allow third-party software to host Microsoft Office web applications.
However, in June 2024, the Commission published a Statement of Objections, containing preliminary findings that:
- Microsoft is dominant worldwide in the market for SaaS productivity applications for professional use;
- Microsoft has been tying Teams with its core SaaS productivity applications; and
- Microsoft restricted competition on the market for cloud-based communication and collaboration products.
Microsoft subsequently offered commitments to the Commission, including to make available versions of the suites without Teams, allowing customers to switch between suites with and without Teams at any time, and allowing competitors to integrate Microsoft services in their own application. The Commission accepted these commitments following the implementation of modifications requested by the Commission, including a further reduction of the price proposed for the suites without Teams by a further 50%. The commitments will be binding for seven years, with certain commitments in respect of data portability and interoperability - between Microsoft products and third-party competitors of Teams - being binding for ten years.
Comment
The cloud computing sector has recently been subject to a number of high profile competition interventions in the UK, including the Competition and Markets Authority’s market investigation, which recommended that the CMA use its digital markets powers to open investigations into Microsoft and Amazon Web Services, and the competition claim brought by Which? against Apple, regarding Apple’s cloud storage systems. However, this is the first instance in which SaaS has been specifically investigated by a major competition authority (while the CMA referred to SaaS in its market investigation, it was excluded from the scope of its review). The CMA found that SaaS was part of a different market to IaaS and PaaS services – it is therefore notable that the Commission preliminarily identified dominance in a SaaS market. This is a finding which may prove important for future considerations of the broader market for software distribution.
Microsoft’s commitments have been welcomed by the complainants. However, this provides a further indication that the cloud software market is marked by limited competition between powerful entities, which should be careful of how they operate in these markets – the regulatory and private actions in this space demonstrate that they should expect to be held accountable should they breach competition laws.