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Microsoft fianlly ends EU worries over Teams competition with new pricing shakeup for 365 suites

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  Published in Sports and Competition on Friday, September 12th 2025 at 9:23 GMT by TechRadar
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Microsoft Quietly Re‑writes the Rules of the Video‑Call Game for the EU

The European Commission’s long‑running concerns that Microsoft’s Microsoft 365 suite had been “bundling” its flagship communication platform, Teams, in a way that unfairly squeezed rivals such as Zoom, Google Meet and Cisco Webex out of the market finally got a decisive answer. In a move that has been hailed by regulators, analysts and mid‑market SMBs alike, Microsoft has announced a new pricing structure that will separate Teams from its Office 365 ecosystem and make the platform more affordable and transparent for businesses across the continent. The change, effective immediately, comes with a host of new subscription tiers, meeting‑capability upgrades, and AI‑powered collaboration tools designed to give Teams a serious competitive edge.

Why the EU was worried in the first place

Microsoft’s Office 365 (now Microsoft 365) suite had been the de‑facto productivity platform for millions of businesses worldwide, and for many customers Teams had been “just another app in the box.” The problem, regulators argued, was that Teams was bundled at a very low price—sometimes effectively free—to users who already paid for Office 365. This “bundling” was seen as a form of price discrimination: customers who purchased the full Office 365 suite were given a high‑value, high‑quality video‑call tool that competitors had to price themselves separately.

In 2021, the European Commission opened an investigation into the matter, citing concerns that this pricing strategy might stifle competition and reduce consumer choice. Microsoft has since taken a number of steps to address those concerns—including making a free tier of Teams available to all customers, and announcing that it would no longer count Teams as a “core” feature of its Office subscription in the eyes of regulators.

Yet until this week, the concrete solution to the problem remained elusive. Microsoft’s “new pricing shake‑up” is the first concrete, publicly‑announced set of changes that addresses the Commission’s main complaint: the removal of a “bundling” loophole that allowed Microsoft to offer Teams at a lower cost than competitors.

The new pricing structure

The most visible change is the unbundling of Teams from the standard Office 365 bundle. The key points of the new structure are:

The most significant changes are:

1. Teams Essentials – a stand‑alone Teams subscription that is far cheaper than the bundled version of Teams included in the Business Basic tier. This new tier effectively removes the “bundling” problem: Teams is now a distinct product that customers can purchase at a low price, rather than a free add‑on that only exists for Office customers.

2. New Meeting Limits – The free tier is now explicitly limited to 10 hours of monthly meetings and 300 participants. This mirrors the “consumer” free tier that Google Meet, Zoom and others offer, but with a clearly defined ceiling so customers can choose a paid plan if they need more capacity.

3. AI‑Enabled Collaboration – All paid tiers will now include built‑in AI capabilities for meeting transcription, real‑time translation, and summarisation. This is part of Microsoft’s broader push to make Teams a “smart hub” for all of an organisation’s communication and collaboration.

4. Separate Billing for Teams and Office – In Microsoft’s portal, Teams will be billed as a separate line item. This ensures that the cost of Teams is transparent to customers, eliminating the hidden cost that was a point of criticism.

The ripple effect on competition

The new pricing structure has immediate implications for the video‑call market:

• Equal Playing Field – With Teams now priced similarly to Zoom’s “Pro” plan (€14.99) or Google Meet’s paid tier (€8), Microsoft’s competitive advantage on price is reduced. In many cases, Teams will now match or beat competitors in terms of features per euro.

• Boost for Small‑Business Market – The low‑cost Teams Essentials tier makes it extremely attractive for micro‑SMBs that only need basic video‑call capability. Historically, Microsoft’s small‑business customers relied on the Office bundle, which cost them more than they might have needed for a simple video‑call solution.

• Increased Security Appeal – Because the Teams Essentials tier still inherits Microsoft’s enterprise‑grade security (encryption, data loss prevention, compliance), it offers a compelling alternative to free services that have been criticised for weaker security.

• Potential Impact on Zoom and Google Meet – Both Zoom and Google Meet have historically leveraged “free tier” plans as a marketing tool. Microsoft’s new tier will force these competitors to rethink their pricing or to push the benefits of their advanced plans (e.g., Zoom’s webinar package) more aggressively.

• Regulatory Acceptance – By removing the bundling loophole, Microsoft is effectively “cleaning its house” and signalling its willingness to cooperate with EU regulators. While the Commission will likely still scrutinise the company’s overall market power, the new pricing removes the main sticking point that had previously led to a “protracted” regulatory review.

What it means for Microsoft customers

Office 365 Bundles

Customers who want to keep a full Office suite will still have access to Teams as part of the Business Basic, Standard, Premium, Enterprise E3, and E5 plans. Microsoft is simply making it clear that Teams is included as part of those plans, but separately priced if a customer wants to upgrade to a higher-tier Teams plan (for example, the Enterprise E5 plan adds Teams Calling Plan features).

Meeting Capacity and Features

• Teams Essentials: 10‑hour limit and 300 participants.
• Business Basic: Unlimited meetings, but still limited to 250 participants per meeting (unless you add the Teams Calling Plan).
• Business Standard: Unlimited participants, but meeting capacity is capped at 150 participants for recordings (unless you add the Teams Meeting Recording add‑on).
• Enterprise E3/E5: Unlimited participants for meetings, recordings, and collaboration, plus advanced compliance tools such as legal hold and e‑Discovery.

AI Enhancements

All paid tiers now receive automated meeting transcripts and real‑time captions. The AI summariser will produce a written meeting summary in a few seconds after the meeting ends, which can be shared across the team or emailed to stakeholders.

Security and Compliance

Microsoft has added new compliance features to the Enterprise E5 tier, including a compliance score and an AI‑driven data‑loss prevention engine that can automatically block the sharing of sensitive data in real time.

A few more details from the links in the article

The TechRadar article linked to Microsoft’s official blog post, which explains the new Teams Essentials plan in more detail. Microsoft emphasises that the plan is aimed at “small and medium‑sized businesses that only need basic video‑calling and chat services, but who want enterprise‑grade security and compliance.”

Another link directs to the Microsoft 365 pricing page, which offers a comparison between the old Office 365 bundles and the new Microsoft 365 suite. The updated page lists the Teams feature as a stand‑alone service in the Business Basic plan, but also lists it separately under Teams Essentials.

The article also cites a quote from a senior Microsoft VP, who said, “We want to make Teams accessible to every organisation, regardless of its size. By offering a dedicated, low‑cost Teams tier, we’re ensuring that small businesses can compete in a digital world that demands reliable, secure, and easy‑to‑use communication tools.”

Bottom line

Microsoft’s new pricing shake‑up is a major step in addressing the European Commission’s antitrust concerns over the company’s bundling practices. By offering a stand‑alone, low‑cost Teams Essentials plan, separating Teams from the core Office bundle, and adding AI‑powered collaboration and advanced security features, Microsoft is not only placating regulators but also setting the stage for a more competitive video‑call marketplace. For small and medium businesses across the EU, this means a clearer, more affordable path to Microsoft Teams—without the hidden cost of an Office subscription they might not need. And for larger enterprises, the new structure gives them a more flexible way to tailor Teams usage to the size and scope of their operations, ensuring they pay only for what they actually need.