The European Commission (EC) is investigating Microsoft’s Office and Teams products after receiving a complaint in 2020 from office messaging app Slack, owned by US software company Salesforce.

Microsoft added Teams to its Office 365 suite for free in 2017. It replaced Skype for Business and became popular during the pandemic, in part because of its video conferencing capabilities.

However, Microsoft’s competitors argue that bundling these products together gives Microsoft an unfair advantage. The tech giant began selling Teams and Office separately in the EU and Switzerland on October 1 last year.

Microsoft said it will launch a new line of commercial Microsoft 365 and Office 365 products that do not include Teams in regions outside the European Economic Area (EEA) and Switzerland, along with a new standalone Teams app (Teams Standalone). Starting April 1, customers can continue with their current contracts, upgrade, or switch to the new products.

For new commercial customers, Office plans without Teams range from $7.75 to $54.75 depending on the product, while Teams Standalone will cost $5.25. These numbers may vary by country and currency.

After the US Department of Justice sued Microsoft in 1998 for using the dominant position of its Windows platform to suppress competition from rival web browsers, the company eventually relented, loosening its control over what computer manufacturers could install on their products.

Rival web browsers have become much more popular since the change. But analysts say Microsoft’s separation of Teams from Office may not have as big an impact.

After Microsoft Teams is separated from Microsoft 365 and Office Suites in Europe in October 2023, the number of users of the platform will remain largely unchanged, according to market research firm Sensor Tower. The number of monthly active users of the Microsoft Teams mobile app in the first quarter of 2024 will remain at the same level as in the fourth quarter of 2023, at 19 million.

The move may not completely eliminate regulatory scrutiny, but the fact that Microsoft is willing to cooperate in this way may soften regulators’ stance, said software expert Gil Luria of DA Davidson.

Microsoft has been hit with EU antitrust fines totaling €2.2 billion ($2.4 billion) over the past decade for bundling two or more products together. This time, Microsoft risks a fine of 10% of its annual global revenue if it is found to have violated antitrust laws.

Microsoft told EU antitrust regulators that its search engine Google is gaining a competitive advantage in artificial intelligence (AI) thanks to large data sets and AI chips.

Microsoft made the comments as the European Commission launched a consultation from January 2024 on competition in the field of generative AI.

Generative AI is technology that can generate human-like responses to text prompts, with applications like ChatGPT from Microsoft-backed OpenAI and Google’s Gemini.

The growing popularity of generative AI has raised concerns about misinformation and fake news.

In the report, Microsoft argues that today, only Google has the strength and independence at every layer of AI, from chips to mobile app stores. Other companies will have to rely on collaboration to innovate and compete.

According to Microsoft, Google’s AI chips will give the corporation a competitive advantage in the coming years, while large datasets of proprietary software from the Google Search Index and YouTube allow Google to train its large language model Gemini.

Microsoft argues that YouTube offers a superior collection of video content, based on an estimated 14 billion videos. Google has access to such content, while other AI developers do not.

Meanwhile, Google hopes the European Commission’s study will show that there are companies taking a similar approach to AI services.

Microsoft, which has invested more than $10 billion in OpenAI, is trying to allay concerns about such partnerships between big tech companies and startups.

Google believes that startups that rely on investments and partnerships can pave the way for growth and expansion.

Meanwhile, according to sources familiar with the matter, Microsoft and OpenAI are planning a data center project that could be worth up to $100 billion, including an AI supercomputer called “Stargate” that will launch in 2028.

The rapid adoption of generative AI technology has led to a surge in demand for AI data centers, which are capable of handling more advanced tasks than traditional data centers. But the cost of such a center is also expected to be 100 times that of some of the largest existing data centers.