Economy

Regulators Force Another Microsoft Split

Satya Nadella, Microsoft’s C.E.O., has presided over a period of rapid growth at the tech giant, but that’s now spurring more regulatory scrutiny.Credit…Anna Gordon/Reuters

Microsoft unbundles, again

Microsoft is separating Teams, its popular video and chat app, from its Office software suite in markets around the world, broadening a split that began in the European Union last fall.

It appears to be the latest effort by the software giant to head off investigations by global antitrust enforcers as regulators examine the power of Big Tech.

Rivals have complained about the Teams-Office bundle for years. Microsoft first added the video and document collaboration program to its business software suite in 2017, and saw Teams’s popularity soar after the coronavirus pandemic unleashed a boom in hybrid and remote working.

At the height of the lockdown in 2020, Slack filed a complaint with the European Commission accusing Microsoft of anticompetitive behavior by bundling Teams with Office. (Three months later, Slack agreed to sell itself to Salesforce for $27.7 billion.) And last summer, Eric Yuan, the C.E.O. of Zoom, called on the F.T.C. to follow the E.U. in investigating the Teams-Office tie-up.

It’s unclear if Microsoft’s decision will help it avoid an E.U. fine, which could cost the company up to 10 percent of global revenue. The company told Reuters that the move “addresses feedback from the European Commission by providing multinational companies more flexibility when they want to standardize their purchasing across geographies.”

It comes as tech behemoths are facing investigations by regulators worldwide. Last month, the Justice Department sued Apple over its tight control of the iOS operating system, while Google is awaiting a judge’s verdict in a U.S. lawsuit over its search monopoly.

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