EU Settles the Microsoft Teams Antitrust Case: What It Means for Your Licensing and Costs

The Background

In July 2020, Slack (now owned by Salesforce) filed an antitrust complaint with the European Commission, alleging that Microsoft was abusing its dominant market position by bundling Teams with Microsoft 365 and Office 365 suites. The argument was simple: if every M365 customer gets Teams for free, competing products like Slack cannot compete on a level playing field.

German video conferencing company alfaview joined as a second complainant. The European Commission launched a formal investigation in July 2023.

What Microsoft Agreed To

On September 12, 2025, the EU accepted binding commitments from Microsoft to resolve the case. Microsoft avoided what could have been fines of up to $24.5 billion (10% of global annual revenue). Here are the key terms:

Pricing Changes

Microsoft now offers M365 and Office 365 suites without Teams at a reduced price

The reduction amounts to approximately $2 per user per month for enterprise plans

Teams is available as a separate add-on at $5.25 per user per month (enterprise) for customers who want it

The unbundling applies globally, not just in the EU

Interoperability

Microsoft committed to ensuring that competing products can integrate with M365 applications

Rivals can access the same APIs and integration hooks that Teams uses

This extends for 10 years

Data Portability

Customers can export their Teams data to competing services

This includes chat history, files, and channel data

Data portability commitments extend for 10 years

Duration

The pricing and unbundling commitments last 7 years

The interoperability and data portability commitments last 10 years

How It Affects Your Licensing

Before the Unbundling

After the Unbundling

Wait, It Actually Costs More Now?

Yes. If you read those numbers carefully, you will notice that for customers who want Teams (which is most customers), the new pricing structure is actually more expensive than the old bundled pricing.

Before: M365 E3 with Teams = $36/user/month

After: M365 E3 without Teams ($34) + Teams add-on ($5.25) = $39.25/user/month

This is a $3.25/user/month increase. For a 10,000-user organization, that is $390,000 per year more if you are a new customer buying at the unbundled prices.

The Catch

Existing customers who had Teams bundled in their license agreements keep their current pricing as long as they renew. The unbundled pricing applies to new purchases and new customers. Microsoft was careful to structure the deal so that existing customers are not disrupted.

Who Benefits and Who Loses

Winners

Slack, Zoom, and other competitors — they can now point to the unbundled pricing and argue that their product is cost-competitive with Teams when Teams costs an additional $5.25/month

Large enterprises that genuinely do not need Teams — organizations that use Slack or Zoom for collaboration and only need M365 for Office apps save $2/user/month

EU regulators — they got concessions without a lengthy court battle

Losers

New customers who want Teams — they pay more than the old bundled price

Small businesses — the $5.25 Teams add-on is a new line item that did not exist before

Customers who do not understand the licensing — there is now more complexity in M365 licensing, which was already confusing enough

Does Teams Phone Licensing Change?

No. Teams Phone licensing ($8/user/month add-on or included in E5) is unaffected by the unbundling. If you are deploying Teams as your voice platform, you still need:

A Microsoft 365 license (with or without Teams depending on the new structure)

The Teams add-on if you bought the unbundled suite

Teams Phone license ($8/user/month) or included in E5

PSTN connectivity (Calling Plan, Operator Connect, or Direct Routing)

The voice licensing stack remains the same. The unbundling only affects the base Teams application (chat, meetings, channels).

My Take

This was a political compromise. Microsoft avoided a massive fine. Competitors got the optics of "unbundling." But the practical impact on most customers is minimal to slightly negative.

If you are an existing M365 customer with Teams, nothing changes for you on renewal. If you are a new customer, you now pay more for the same thing. The interoperability commitments are genuinely positive for the ecosystem, but it remains to be seen how deeply Microsoft will actually implement them.

The real lesson is for IT procurement teams: read your licensing agreements carefully, understand the difference between bundled and unbundled pricing, and negotiate with your Microsoft account team. The published prices are not the prices most enterprises pay.

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