After years of back-and-forth, U.S. tech giant Microsoft’s (MSFT) antitrust dispute with the European Union (EU) is over. On Friday, the European Commission, the executive arm of the EU, disclosed that it had accepted commitments put forward by the U.S. technology giant to address its competition-rules concerns.
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The concerns relate to Microsoft’s bundling together of its group collaboration software Teams with its other productivity suites, Office 365 and Microsoft 365, for business customers in Europe. In early trading on Friday, Microsoft’s shares jumped 1.46% as of 5:49 a.m. EDT to over $508.
The announcement comes several months after news emerged that Microsoft might dodge the Commission’s antitrust fines as the body was seeking feedback on the tech company’s offer to settle its probe into the matter. In April last year, Microsoft made the move to market Teams separately from its other suites across all markets. These suites house Microsoft’s popular productivity software, such as Word, Excel, PowerPoint, and Outlook.
The Commission’s probe followed complaints by competitors, particularly Slack, the workplace communication platform owned by software giant Salesforce (CRM), which accused the American tech giant of unfair business practices. Consequently, in 2023, the European Commission opened a formal investigation into the matter and, in June last year, slammed Microsoft for violating its antitrust rules by bundling Teams with its other products since 2019.
However, Slack withdrew its complaints about three months ago after the antitrust regulator concluded a market test on the new commitments offered by Microsoft.
Microsoft Pledges Changes
According to the European Commission, one of the key accepted pledges made by Microsoft includes that the technology company will make available to customers versions of its productivity suites that exclude Teams and are offered at a reduced price. Microsoft will also have to allow its customers with long-term licenses to switch to these suites without Teams.
Furthermore, Microsoft is to enable rival platforms to integrate their software with Teams and certain other products that it owns. The technology company is also to help facilitate the transfer of customer data out of Teams into other rival platforms.
“By helping to restore fair competition, these commitments will open up the market for other providers of communication and collaboration tools in Europe,” the European Commission said in a statement.
Is Microsoft a Buy or Sell Now?
Meanwhile, Microsoft’s shares rose during extended trading on Thursday after the tech giant agreed to modify its partnership deal with artificial intelligence firm OpenAI to enable the latter to restructure as a for-profit entity.
On Wall Street, MSFT stock currently boasts a Strong Buy consensus recommendation based on 33 Buy and one Hold ratings over the last three months, as seen on TipRanks. The average MSFT price target of $626.88 suggests over 25% growth potential from current levels.
