❌ ANTI-TRUST

Why Is Microsoft Unbundling Teams And Office 365?

If you work in an office—or even remotely, but do "office" work—it's likely you use the Microsoft Office suite as a core part of your documents workflow. Of course, Microsoft knows this, and has bundled its Teams app with the suite since 2017.

Then, when the pandemic exploded the popularity of chat apps like Teams, Slack, Google Meets, and Zoom, things got heated. 

"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," writes the New York Times. "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." 

Seems the other kids in the schoolyard thought Microsoft was playing a bit too anticompetitive-ly.

Well, in October, Microsoft unbundled Teams from its Office suite and sold the two independently to customers in the EU and Switzerland, reports Reuters. The move was seen as way to head off a possible antitrust investigation from the European Commission. Whether that's the case or not, Microsoft has announced this week that it would unbundle Teams from Office globally.

"To ensure clarity for our customers, we are extending the steps we took last year to unbundle Teams from M365 and O365 in the European Economic Area and Switzerland to customers globally," a spokesperson for the tech giant told Reuters. "Doing so also addresses feedback from the European Commission by providing multinational companies more flexibility when they want to standardize their purchasing across geographies." 

"This move may not completely ward off further regulatory scrutiny, but showing regulators Microsoft is willing to be proactive could still soften the stance by regulators," Gil Luria with D.A. Davidson added. 

And an EU fine could be punishing for Microsoft. The penalty is 10% of the overall annual revenue of the company globally, which amounts to several billions for the company. And speaking of profits, Microsoft shares rose, despite the announcement, "as analysts questioned whether the move would mean much for the tech giant’s bottom line," the Times states. "Data from the research firm Sensor Tower showed that use of Teams stayed relatively stable even after the program was cleaved out of Office in the E.U."

Continued Scrutiny 

As we've written about here before (several times), this is the era of antitrust scrutiny for Microsoft and the rest of its Big Tech cohort. So, sure, Microsoft might be potentially saving itself from an investigation looking into Teams, but will that satisfy regulators in the EU, US, and beyond?

The Feds already ruffled Microsoft's acquisition of Blizzard late last year over concerns of a video game monopoly, and multiple agencies globally are investigating the Redmond, Washington, firm's involvement with OpenAI. "We are inviting businesses and experts to tell us about any competition issues that they may perceive in these industries, whilst also closely monitoring AI partnerships to ensure they do not unduly distort market dynamics," said Margrethe Vestager, the EU antitrust chief.

THE VERDICT:

Antitrust fever is showing no signs of breaking globally, and Big Tech is learning to shuffle its board pieces to avoid some of the harshest scrutiny. Though, said another way, even the threat of an antitrust suit is enough to affect change in these Silicon Valley (and Wall Street) behemoths.

🔒 SECURITY

The FCC Wants To Make The Net Neutral Again

The year was 2015. Hotline Bling was the song everyone was singing. Game of Thrones was still dominating watercooler talk. And Net Neutrality was the major issue the Internet was rallying behind. That year, the Obama Administration's FCC succeeded in setting rules for a neutral net that were subsequently repealed by the Trump Administration's FCC in 2017. But now, FCC Chairwoman Jessica Rosenworcel plans to vote on reinstating those 2015 neutrality rules again.

As TechCrunch reports, “'Safeguarding and Securing the Open Internet' is based on 2015’s Open Internet Order, which classifies broadband as a 'Title II' communication service."

What is a "Title II" communication service, you ask? “Title II" is a reference to the Communications Act of 1934, and it would "classify broadband internet as a means of communication or 'telecommunications’ rather than its current classification as an 'information service.' Title II is often equated with net neutrality, but it could actually have a larger impact on broadband access and use," notes the National Digital Inclusion Alliance. "Because this change means increased regulation for broadband services, ISPs tend to object to this change."

But if one president's administration instates such rules and the next repeals them and the game of pong repeats every 4 to 8 years, what are internet service providers (ISPs) to do?

"For this, the FCC was not able to provide a satisfactory answer," says TechCrunch, "only that it believed it had firm legal footing and a shared hope that this would be the last time the committee was forced to revisit these rules."

Meanwhile, Reuters cites that "despite the 2017 repeal, a dozen states now have net neutrality laws or regulations in place. Industry groups abandoned legal challenges to those state requirements in May 2022." In other words, if the FCC is successful this time in reinstating net neutrality, it's hard to believe that any future repeal would have general counsels at ISPs advising the executives to stop following the old laws.

Security

If you're wondering why the FCC is trying to reinstate net neutrality now—7 years after it was repealed, and 2.5 years into the Biden Administration, security and privacy concerns might be at play. "For example, without reclassification, the FCC is limited in its authority to direct foreign-owned companies deemed to be national security threats to discontinue any domestic or international broadband services under Sec. 214 [of the Communications Act]– as the agency has done with telephone services,” writes Deadline. Moreover, the FCC would be able to regulate how ISPs sell personal information of its users, and be better equipped to address service outages.

THE VERDICT:

Despite the political showmanship, should reinstatement pass, the regulatory back and forth has been a mess for ISPs and the internet writ large. Hopefully, once the April 25 vote comes, whatever decision is reached will stick for good this time.