By Mauro Orru and Edith Hancock

The European Union accepted proposals from Microsoft over how it distributes its Teams collaboration platform in the bloc, settling an antitrust probe that could have resulted in a fine for the tech giant.

The European Commission, the EU's executive arm, opened a formal investigation in 2023 into Microsoft's bundling of Teams with its popular Office productivity software after receiving a complaint from business-messaging-app maker Slack Technologies, now owned by Salesforce.

Officials in the bloc raised preliminary concerns that Microsoft broke antitrust rules, arguing that tying Teams to popular applications like Word and Outlook included in its Office 365 and Microsoft 365 suites gave Teams an unfair advantage.

After the EU launched its investigation, Microsoft made changes to how it distributed Teams, offering business customers versions of its productivity suites without Teams. However, the commission said those changes didn't go far enough.

Microsoft then made a series of commitments that the EU has now accepted.

These include the company making versions of its Office 365 and Microsoft 365 suites available without Teams at a reduced price and allow customers with long-term licenses to switch to suites without Teams.

It will also ensure there is interoperability for key functionalities between tools that compete with Teams and certain Microsoft products. Microsoft will also let customers move their data out of Teams, changes the EU said would open up the market for other providers of communication and collaboration tools in the bloc.

"We appreciate the dialog with the commission that led to this agreement, and we turn now to implementing these new obligations promptly and fully," Nanna-Louise Linde, Microsoft's vice president of European government affairs, said.

The EU said Microsoft's commitments would remain in force for seven years, while those related to interoperability and data portability will last 10 years. A trustee will monitor their implementation and act as mediator between Microsoft and third parties in case of disputes.

The settlement is a win for Microsoft as the company is now able to put the case behind it and avoid a fine that could have irked U.S. President Trump at a delicate time for trade relations.

Last week, the EU fined Alphabet's Google nearly $3.5 billion for abusing the dominance of its advertising-technology tools. Google said it would appeal the EU decision and fine, which it described as wrong and unjustified.

Trump called the move discriminatory and threatened to open a Section 301 trade investigation "to nullify the unfair penalties" that he said are being charged to American companies.

Speaking at a conference in Florence on Friday, Teresa Ribera, the EU's top competition enforcer, said the bloc wouldn't shy away from antitrust enforcement. However, she also stressed the importance of soft enforcement, when officials engage in dialog with companies they suspect of breaches in a bid to get concessions, as happened in the Microsoft case.

"This decision shows that our soft enforcement approach can be particularly important in digital markets, where new products and integration strategies often challenge the boundaries of regulation. So, we need quick and cooperative interventions," she said.

Write to Mauro Orru at mauro.orru@wsj.com and Edith Hancock at edith.hancock@wsj.com

(END) Dow Jones Newswires

September 12, 2025 05:37 ET (09:37 GMT)

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