Microsoft faces CMA investigation over Copilot subscription price hike and customer transparency

Microsoft Under UK Regulator Probe for Copilot Bundling Practices

The Competition and Markets Authority announced on July 29 that it has opened a CMA investigation into Microsoft over concerns that the tech giant may have misled customers during a significant change to its Microsoft 365 subscription plans 1

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. The competition probe centers on whether subscribers received clear information about their options when Microsoft added Copilot and raised prices in January 2025 2

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The issue stems from Microsoft's decision to bundle its AI assistant into Microsoft 365 Personal and Family plans. Existing customers initially received access to the new features at no extra cost mid-subscription, but faced a different reality at renewal 3

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. Unless subscribers actively switched plans or canceled altogether, they were automatically moved onto a more expensive tier containing Copilot 1

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The £25 Question: AI Subscription Prices and Transparency

The subscription price hike represents a substantial increase for UK households. An annual Microsoft 365 Personal plan with Copilot costs £84.99, compared to £59.99 for the Classic plan without the AI features—a £25 difference that affects millions of UK subscribers 2

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. The Family plan followed the same pattern, gaining Copilot and higher renewal pricing 2

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While Microsoft did offer existing customers the option to switch to a cheaper Classic plan to avoid both Copilot and the price increase, the UK regulator probe questions whether this alternative was made sufficiently clear 1

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. The CMA's concern focuses on disclosure rather than the technology itself, examining whether customers received "clear and timely information" at the critical renewal point where default settings carry the most weight 2

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Regulatory Scrutiny Extends Beyond UK Borders

This investigation adds to mounting regulatory scrutiny Microsoft faces globally. The company already confronts the CMA's strategic market status inquiry into its business software and a broader examination of how Amazon and Microsoft dominate cloud computing in the UK 2

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. Microsoft also faces a £1bn cloud-licensing claim in Britain 2

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Australian regulators previously squeezed an apology from Microsoft's local division for failing to communicate the cheaper Classic plan option clearly 1

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. Authorities in Italy are also investigating Microsoft over information provided to customers when plans renewed, according to the CMA 3

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Consumer Protection in the Age of Auto-Renewing Subscriptions

Hayley Fletcher, senior director for consumer protection at the CMA, emphasized the stakes: "When a business changes its subscription plans, customers need clear and timely information about their options. Our investigation will consider whether Microsoft customers were misled and ended up paying more as a result" 1

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The case reflects a broader regulatory shift toward scrutinizing auto-renewing subscriptions, where price rises and added features arrive with defaults that most customers never actively accept 2

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. Fletcher added that as people rely more on AI tools like Copilot, "it's important that everyone is able to access these through fair and transparent practices" 4

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Market Position and What Comes Next

According to PYMNTS Intelligence, among consumers using dedicated AI platforms, 30% reported using Copilot, compared to 83% for ChatGPT and 48% for Google Gemini 4

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. This competitive landscape makes pricing transparency and fair consumer treatment increasingly critical as tech companies race to embed AI features into existing products.

Microsoft responded that "consumer trust and transparency are priorities for Microsoft, and we are reviewing the CMA's claims in detail. We remain committed to working constructively with the regulator as their inquiry progresses" 1

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. The CMA emphasized it has not yet concluded whether Microsoft broke UK consumer law, as the investigation remains at an early stage 5

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If the CMA finds violations, remedies could range from requiring Microsoft to change how it presents renewals to seeking redress for customers, though any such steps would follow months of investigation 2

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. The probe signals that bundling AI into products people already pay for has attracted serious regulatory attention, testing whether customers receive a fair chance to decline Copilot price rises.🟡 Atkinson, P. (2023). "Palaeontology, Stratigraphy and the Geological Timescale: Lessons from the life and work of Patrick Macgill". Journal of the Geological Society, 180(4), jgs2023-018.🟡 Atkinson, P. (2023). "Palaeontology, Stratigraphy and the Geological Timescale: Lessons from the life and work of Patrick Macgill". Journal of the Geological Society, 180(4), jgs2023-018.