Microsoft files new EU commitments on cloud licensing and Teams unbundling to defuse antitrust risk

Microsoft submitted a binding commitments proposal to the European Commission on Wednesday in Brussels, seeking to settle probes into its cloud software licensing and the bundling of Teams with Microsoft 365. The plan widens where customers can run Microsoft software, codifies the global Teams unbundling introduced in 2024, and offers time limited relief on data exit fees for European customers, according to people familiar with the filing.

The move comes as regulators consider penalties of up to 10 percent of global revenue for antitrust violations. The Commission issued a statement of objections on Teams in 2024 and has fielded complaints on cloud licensing from providers including OVHcloud and Aruba, as well as Google Cloud.

What is in Microsoft’s offer

Microsoft proposes to expand bring your own license rights for Windows Server, SQL Server, and Microsoft 365 so customers can use those licenses on any European cloud without the 2022 restrictions that singled out large rivals. The company also commits to publish and maintain technical documentation that eases migration to and from Azure, and to waive or sharply reduce data egress fees for customers switching away from Azure in the European Economic Area for a defined period, said the people.

On collaboration software, Microsoft offers to keep Teams sold separately from Microsoft 365 and Office 365 globally, a change first made in Europe in 2023 and extended worldwide in April 2024. It also pledges clearer interoperability documentation for meetings, messaging, and calendar integrations used by rivals.

Why regulators care about lock in

Cloud market concentration and switching costs remain a central concern for competition authorities. Synergy Research Group estimated that in mid 2024 Amazon Web Services held roughly 31 percent of global IaaS and PaaS spend, Microsoft Azure had about 25 percent, and Google Cloud had near 11 percent. The UK Competition and Markets Authority, following a 2023 referral by Ofcom, flagged data egress fees and discount structures as barriers to switching in its 2024 cloud infrastructure work.

Google Cloud has argued that Microsoft’s past licensing changes harmed competition, with vice president Amit Zavery calling them a tax on customers in 2024. CISPE, whose members include OVHcloud and Aruba, also criticized vendor practices that limit portability of software across clouds.

The Commission can market test the commitments before deciding whether to make them legally binding. A decision would signal how far Brussels expects dominant vendors to go on license portability and data mobility, and guide similar scrutiny in the UK and the United States as hyperscalers balance profit models with compliance expectations.