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Microsoft Teams in the Legal Spotlight: Navigating the New Licensing Landscape

Teams in legal spotlight LoopUp blog

Do I need to read this?

If your billing address used for your Microsoft licensing agreement is outside of the European Economic Area (EEA) or Switzerland AND you don’t have any employees in the EEA or Switzerland, then there will be no impact to you, and you will not see any change.

Why the change?

Prompted by the European Commission’s concerns over potential anti-competitive behavior Microsoft announced on the 31st August 2023 that they will be making new licensing options available that unbundle Microsoft Teams from the popular Office 365 and Microsoft 365 licensing suites for organizations in the EEA and Switzerland.

Microsoft has taken this proactive step to incorporate feedback from the European Commission to avoid potential disruption to their customers.

What is Microsoft Changing?

Microsoft made three points in their announcement to address the European Commission’s concerns, the aim of this article is to focus on the first point, and that is:

  • Microsoft has committed to unbundling the Microsoft Teams license from their existing bundles, if this topic interests you, then please keep reading.

The other two points made are:

  • Microsoft has announced plans to improve interoperability with Microsoft 365 and Office 365 by enhancing support resources and streamlining documentation for application developers.
  • Microsoft plans to extend Teams’ seamless Office integration features such as displaying, editing, and co-authoring Word, Excel, and PowerPoint documents in to competing apps and services, eliminating the need for these companies to develop their own solutions.

Which, I’m sure we can all agree are both ultimately good things.

How is the licensing changing?

As with most things relating to Microsoft Licensing, it’s not straight forward and has several nuances. The main ones that affect how you are impacted are:

  • If your billing address for your licensing agreement is within the EEA or Switzerland
  • If outside EEA or Switzerland, do you have users within the EEA or Switzerland
  • The type of licensing bundle (Enterprise, Frontline Worker, or SMB)
  • If you already have applicable Microsoft 365 or Office 365 licenses in your existing agreement

Here’s a simplified table to help you visualize the options if you are a customer with Enterprise license bundles (Office 365 E1/E3/E5 or Microsoft 365 E3/E5).

Teams Licensing Table

Customers with Frontline Worker bundles (Office 365 F3 or Microsoft 365 F1/F3) or SMB bundles (Microsoft 365 Business Basic/Standard/Premium) will be able to choose between the existing licenses and the new “EEA (no Teams)” variants.

In all cases, if you purchase the “EEA (no Teams)” license and want to use Teams you need to add the “Microsoft Teams EEA” license.

This does not impact Academic bundles.

When will it happen?

The new licensing options will be available from 1st October 2023.

Will this change cost more?

Yes, Microsoft are reducing the “EEA (no Teams)” bundles, but the standalone Teams license will bring the combined cost up above what the existing bundle will cost.

  • All of the Microsoft 365 and Office 365 Enterprise bundles along with the Microsoft 365 Business Standard and Premium are being reduced by €2.00.
  • Microsoft 365 Business Basic is being reduced by €1.00
  • All Frontline worker licenses are being reduced by €0.50

And the new “Microsoft Teams EEA” standalone license will cost €5.00

Is Teams Phone still included in the new “EEA (no Teams)” bundle?

Yes, the Teams Phone Standard license is still included in the new “EEA (no Teams)” license bundle.


The impact to you is likely to be minimal, but understanding Microsoft’s new licensing landscape is crucial for businesses operating in the EEA and Switzerland. Always talk to your licensing provider to ensure that you are doing the right thing and do not get caught out.

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