Microsoft may sidestep a potentially significant fine from European Union regulators after reportedly offering substantial concessions aimed at resolving a long-running antitrust investigation into its bundling of Microsoft Teams with its Office productivity suite, according to people familiar with the matter.

The U.S. tech giant has been under EU scrutiny since 2020, following a complaint by rival workplace messaging platform Slack, now owned by Salesforce. Slack alleged that Microsoft unfairly integrated Teams into Office 365, giving it an undue advantage and limiting competition in the business communications space.

According to sources close to the talks, Microsoft’s latest proposal includes enhanced commitments that address concerns from the European Commission’s Directorate-General for Competition. These include unbundling Teams from Office for more customers, greater interoperability for competing services, and clearer licensing terms that could benefit third-party software providers.

A Strategic Retreat to Avoid Penalties

Regulators had been considering formal charges, which could have led to a fine as high as 10% of Microsoft’s global revenue — a penalty that could exceed $18 billion based on its 2024 earnings. However, officials now believe that Microsoft’s latest offer might be sufficient to close the case without triggering financial sanctions.

“Microsoft has come back with a more comprehensive package, and the Commission is giving it serious consideration,” said one EU official who spoke on condition of anonymity. “If the remedies are strong enough and market feedback is positive, a fine may be avoided.”

The Commission is expected to seek feedback from Microsoft’s competitors and business customers in the coming weeks to determine if the proposed changes address their concerns. A final decision is not expected before the summer.

What Microsoft Is Offering

While the exact details of the offer have not been publicly disclosed, insiders say Microsoft has expanded its prior commitments:

• Wider unbundling of Teams from Office 365 and Microsoft 365, particularly for enterprise customers across the EU.

• Greater support for interoperability, including improved APIs and documentation that allow rival communication tools to integrate more deeply with Microsoft’s ecosystem.

• Revised pricing structures that allow customers to choose Office without Teams, possibly reducing costs for organizations that prefer alternative tools.

In response to earlier criticisms that its efforts were insufficient, Microsoft’s revised proposal appears designed to meet both the letter and spirit of EU competition law.

A Microsoft spokesperson said in a brief statement: “We continue to cooperate with the European Commission in addressing their concerns in a constructive and respectful manner.”

A Broader Pushback Against Big Tech

The case is one of several recent efforts by the European Commission to rein in the influence of Big Tech firms. Under the Digital Markets Act (DMA), which came into force in March, companies designated as "gatekeepers" face stricter rules to ensure fair competition in digital markets.

Although the Teams case predates the DMA, the law’s passage has added momentum to regulators’ efforts, and Microsoft’s willingness to negotiate may reflect a broader shift in its strategy.

“This is no longer just about one product,” said Annika Larsen, a Brussels-based competition analyst. “Microsoft understands that the regulatory environment in Europe is evolving, and it’s trying to stay ahead of the curve.”

What’s Next?

If Microsoft’s offer passes the market test, the European Commission could close the case without issuing a formal decision or fine — a move that would mark a rare resolution in favor of a tech giant under investigation.

However, some competitors remain skeptical. Salesforce, the parent company of Slack, has yet to comment on the latest developments, but in previous statements it has urged the EU to take decisive action to prevent what it describes as abuse of market power.

For now, the ball remains in Brussels' court. As regulators prepare to gather industry feedback, the tech world will be watching closely to see whether Microsoft’s approach signals a new era of compliance — or simply a strategic pause in a longer legal battle.