Microsoft unbundles, again
Microsoft is separating Teams, its popular video and chat app, from its Office software suite in markets around the world, broadening a split that began in the European Union last fall.
It appears to be the latest effort by the software giant to head off investigations by global antitrust enforcers as regulators examine the power of Big Tech.
Rivals have complained about the Teams-Office bundle for years. Microsoft first added the video and document collaboration program to its business software suite in 2017, and saw Teams’s popularity soar after the coronavirus pandemic unleashed a boom in hybrid and remote working.
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. (Three months later, Slack agreed to sell itself to Salesforce for $27.7 billion.) 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.
It’s unclear if Microsoft’s decision will help it avoid an E.U. fine, which could cost the company up to 10 percent of global revenue. The company told Reuters that the move “addresses feedback from the European Commission by providing multinational companies more flexibility when they want to standardize their purchasing across geographies.”
It comes as tech behemoths are facing investigations by regulators worldwide. Last month, the Justice Department sued Apple over its tight control of the iOS operating system, while Google is awaiting a judge’s verdict in a U.S. lawsuit over its search monopoly.
And Microsoft has drawn scrutiny over its investments in A.I. start-ups like OpenAI and the French company Mistral.
The move is reminiscent of Microsoft’s unbundling of Windows in the 2000s, after a bruising antitrust battle with the Justice Department over the tech company’s efforts to shut rivals out of its platform.
But it’s unclear how consequential this breakup will be. Shares in Microsoft rose on Monday despite the news, as analysts questioned whether the move would mean much for the tech giant’s bottom line. 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.
That suggests rivals may not experience a surge in new customers. (Shares in Zoom fell nearly 1 percent on Monday.) “Teams is so embedded into workflows that I don’t think this has that same impact,” Rishi Jaluria, an analyst at RBC Capital Markets, told Reuters.
HERE’S WHAT’S HAPPENING
Donald Trump posts a $175 million bond to avert seizure of his assets. In securing the bond for his civil fraud case, the former president avoided paying a $454 million penalty while he appeals the judgment. Separately, shares in Trump Media & Technology Group plunged 21 percent on Monday, after the parent company of the Truth Social online platform disclosed just $4 million in revenue for last year.
Disney is said to be winning its proxy fight against the financier Nelson Peltz. The entertainment giant’s slate of board nominees has secured the backing of big shareholders, including BlackRock and T. Rowe Price, ahead of the company’s annual meeting on Wednesday. More than half of Disney’s voting shares have been accounted for, but a big question is how the company’s unusually high percentage of individual shareholders will vote.
A regulator is reportedly scrutinizing investments by Vanguard, BlackRock and State Street in U.S. banks. The F.D.I.C. is examining whether the big money managers are maintaining a sufficiently passive role in managing their stakes, according to The Wall Street Journal. Such firms are exempt from current rules that require regulatory approval to own more than 10 percent of a bank — if they don’t exert influence on management or boards.
A $4.1 billion bet on sports
One of the biggest players in the booming business of sports just got bigger: The private equity firm Arctos Partners has raised another $4.1 billion to do more deals.
The fund-raising shows investor appetite for sports deals is growing as competition ramps up between private equity firms and Gulf countries like Saudi Arabia and Qatar.
Arctos is one of the busiest sports deal makers. Since its founding in 2019, the firm has invested in Formula One, basketball, baseball and soccer clubs. They include the Utah Jazz and Fenway Sports Group.
Sports deals are booming on the back of the skyrocketing value for media rights. John Malone’s Liberty Media, which owns F1, said on Monday that it had bought MotoGP, the motorcycle racing championship, for €4.2 billion ($4.5 billion).
