Microsoft has agreed to sell Office 365 suites unbundled without Teams for a significantly lower price than previously, ending a five-plus-year European Union dispute with Slack and avoiding a fine by the EU.

The software giant was charged with EU antitrust violations in June 2024 for bundling Teams with Office 365 and Microsoft 365 subscriptions. The dispute began in July 2020, when Slack (now owned by Salesforce) filed an official complaint, alleging Microsoft was conducting an «illegal and anti-competitive practice of abusing its market dominance» by tying Teams «into its market-dominant Office productivity suite,» according to a Slack news blog post. 

Microsoft must comply with the EU agreement for at least seven years, or else face penalties. EU competition chief Teresa Ribera said the deal «opens up competition in this crucial market and ensures that businesses can freely choose the communication and collaboration product that best suits their needs.»

Microsoft’s agreement should translate into significant cost savings for Office/Microsoft 365 customers. The difference in price between suites with Teams and those without will drop by a further 50%. The price reductions will take place in the EU but could possibly extend worldwide.

Other changes will include:

• Customers with long-term licenses can switch to licenses that don’t include Teams.
• Teams competitors (like Slack, Google Meet and Zoom) will have interoperability with Office software such as Word and Excel.
• Customers can move their data out of Teams if they want to switch to a different communications platform.

The EU announcement «sends a clear message: Microsoft’s anticompetitive tying of Teams has harmed businesses, denied customers fair choice, and resulted in many years of lost competition,» said Salesforce Chief Legal Officer Sabastian Niles in a statement Friday. 

Slack won’t make much of a dent against Teams in terms of market share, said Anurag Rana, sector head and senior analyst at Bloomberg Intelligence. «Most enterprises have established software tools that they are using internally right now, and we are not expecting them to shift vendors because of lower pricing or any other incentives rivals may offer,» Rana told CNET. «This is not specialized software, and most apps now have comparable features.»

In 2024, Teams had five times as many monthly users as Slack and brought in $8 billion in revenue, roughly double what Slack is projected to bring in this year.