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

Microsoft faces competition probe over Copilot subscription price hike

Microsoft faces an investigation by the UK's competition watchdog over whether customers were misled when it added features to Microsoft 365 subscriptions and raised prices. The issue dates back to January 2025, when Microsoft added new features, including Copilot, to its consumer package. At renewal, customers were automatically moved onto a more expensive tier containing those features unless they switched plans or canceled altogether. Existing customers could switch to a cheaper "Classic" plan without the new features. Remaining on the Copilot-equipped version cost £25 more per year. The Competition and Markets Authority (CMA) is scrutinizing whether Microsoft's communications misled customers about their options. The regulator said: "The investigation will examine whether customers were given key information about the plans and the difference in cost to understand the options available to them before making a decision." A Microsoft spokesperson told The Register: "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." We documented the change at the time. Microsoft also explained how existing subscribers could switch to a Classic plan and avoid both Copilot and the price increase. The CMA said it is "strongly supportive of AI adoption and the benefits this could bring to real people's lives across the UK but has emphasised that no one should be treated unfairly." The investigation is at an early stage, and the CMA has not ascertained if Microsoft broke consumer law. Last year, the UK's Science, Innovation, and Technology Committee questioned Microsoft about the increases and the need to opt out of the more expensive Copilot plan. Australian regulators later squeezed an apology from the company's local tentacle for failing to communicate the cheaper Classic option clearly. Hayley Fletcher, senior director for consumer protection at the CMA, said: "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." ®

UK regulator probes whether Microsoft misled 365 customers over Copilot price rises

The CMA is investigating how Microsoft raised subscription prices and folded in its AI assistant, and whether customers were told clearly enough. Britain's Competition and Markets Authority has opened an investigation into how Microsoft sold its 365 subscriptions, asking whether the company misled personal and family customers when it raised prices and bundled in its Copilot AI assistant. The CMA announced the probe on 29 July, training its attention on the marketing of the plans rather than the technology itself. It adds to a growing list of British headaches for the company. Microsoft already faces the CMA's strategic market status inquiry into its business software, part of a wider look at how Amazon and Microsoft dominate cloud computing in the UK. The subscription issue dates to early 2025. From January that year, Microsoft added Copilot to its 365 Personal and Family plans at no extra charge mid-subscription, then, on renewal, moved customers onto new, pricier plans that included the assistant unless they actively opted out. The cheaper option existed, but was hard to find. Customers who did not want to pay more could switch to a "Classic" plan without Copilot, but Microsoft stopped offering those plans to new customers and, the CMA suggests, did not make the alternative obvious to existing ones. The price gap is the crux. In the UK, an annual Personal plan with Copilot runs to £84.99, against £59.99 for the Classic version, a £25 increase that the regulator says customers may not have clearly understood they were accepting. The Family plan moved the same way. It, too, gained Copilot and a higher renewal price, which means the change reached across a large share of the millions of UK households that pay for a 365 subscription. The CMA's concern is disclosure, not the AI. Its question is whether Microsoft gave customers clear and timely information about their choices at renewal, the point at which a default nudge toward the pricier plan does the most work. "When a business changes its subscription plans, customers need clear and timely information about their options," said Hayley Fletcher of the CMA, framing the case as one about consumer choice rather than the merits of Copilot. The legal basis is worth noting. The investigation rests on existing consumer-protection law covering unfair commercial practices, rather than the newer Digital Markets, Competition and Consumers Act, which hands the CMA sharper powers over the biggest platforms. The subscription case is narrower but more personal than the cloud inquiries. Where those concern market structure, this one is about the ordinary household bill, and the quiet way a renewal can cost more than the customer expected. Microsoft is fighting on several British fronts at once. It is separately facing a £1bn cloud-licensing claim in the UK, so the subscription probe lands on a company already busy in the country's courts and regulators' in-trays. Auto-renewing subscriptions have become a regulatory target more broadly. Consumer watchdogs across several countries have grown wary of the "set it and forget it" model, in which price rises and added features arrive with a default that most customers never actively accept. Microsoft did not comment in the CMA's announcement. The regulator has not accused the company of breaking the law, only opened an investigation, and any finding, or remedy, would come later. If it does find a problem, the CMA's options range from ordering Microsoft to change how it presents renewals to seeking redress for customers, though any such step would follow months of work. For now, the case puts down a marker: bundling AI into products people already pay for has become one of the industry's favourite moves, and Britain's regulator is testing whether customers were given a fair chance to say no.

UK regulator investigates whether Microsoft misled personal and family customers

The Competition and Markets Authority said on ⁠Wednesday ⁠the probe would examine Microsoft's addition of its AI assistant Copilot to Microsoft 365 subscriptions. Personal and family customers were initially offered Copilot at no extra cost, but some later faced higher-priced subscriptions when renewing. Britain's antitrust regulator said it would investigate Microsoft over whether it misled personal and family customers when marketing subscription plans for its ever-popular Microsoft 365 product, resulting in them overpaying. The Competition and Markets Authority said on ⁠Wednesday ⁠the probe would examine Microsoft's addition of its AI assistant Copilot to Microsoft 365 subscriptions. Personal and family customers were initially offered Copilot at no extra cost, but some later faced higher-priced subscriptions when renewing. "The investigation will examine whether customers ⁠were given key information about the plans and the difference in cost to understand the ⁠options available to them before making a decision," the CMA said in a statement. The CMA said while it was supportive of AI adoption across the country, customers always needed clear and timely information. "We are reviewing the CMA's claims in detail," a Microsoft spokesperson said, adding the company remained committed to "working constructively" with the regulator. Microsoft faces numerous competition investigations globally, targeting ⁠its business software, cloud computing and AI partnerships, and the UK's CMA launched a probe into its dominance in business software in May. Authorities in Australia and Italy are also investigating Microsoft over the information provided to customers when plans renewed, the CMA noted.

Microsoft's AI Subscription Prices Probed by UK Regulator | PYMNTS.com

The investigation comes in response to concerns that consumers might not have been given clear information about subscription options when Microsoft changed its Microsoft 365 Personal and Family plans, the U.K.'s Competition and Markets Authority said in the release. "When a business changes its subscription plans, customers need clear and timely information about their options," Hayley Fletcher, the CMA's senior director for consumer protection, said in the release. "Our investigation will consider whether Microsoft customers were misled and ended up paying more as a result. As people rely more and more on AI tools like Copilot, it's important that everyone is able to access these through fair and transparent practices and understand when they have the opportunity to shop around and make choices about which products they want to use." Microsoft last year automatically began giving customers access to new features like Copilot for no added cost for the remainder of their subscription period, according to the release. When that period ended, customers were automatically placed on a plan with the new features at a higher price, unless they canceled or picked another plan. Microsoft offered Personal and Family plan customers a limited-time option to switch to a Classic plan, offering the same features as before at the same price, per the release. For annual Microsoft 365 Personal and Family Plan customers, the plan was 25 pounds (about $33) a year more than the Classic version. "The CMA is looking into whether Microsoft's communications with customers before renewal were misleading," the release said. "The investigation will examine whether customers were given key information about the plans and the difference in cost to understand the options available to them before making a decision." The CMA has not yet concluded whether Microsoft broke the law, according to the release. "Consumer trust and transparency are priorities for Microsoft, and we are reviewing the CMA's claims in detail," a spokesperson for the company said in a statement to PYMNTS. "We remain committed to working constructively with the regulator as their inquiry progresses." PYMNTS Intelligence found that among consumers who use a dedicated AI platform for at least one task, 30% reported using Copilot, compared to 83% for OpenAI's ChatGPT and 48% for Google's Gemini.

Microsoft Investigated by U.K. Regulator Over Marketing of Subscription Plans -- Update

The U.K.'s antitrust watchdog said it is investigating Microsoft over concerns that its customers might not have been given clear information about subscription options when the tech giant made tweaks to its Microsoft 365 plans. The Competition and Markets Authority said Wednesday that its probe focuses on changes the company made to the software package's Personal and Family subscription plans, which offer access to productivity tools such as Outlook email and its artificial-intelligence assistant Copilot. Microsoft started giving existing customers access to new features such as Copilot for free on their subscriptions from January 2025, and they were automatically brought onto a new plan with a higher price when their subscriptions ended unless they chose another plan or actively ended their subscriptions, the CMA said. A Microsoft spokesperson said the company is reviewing the CMA's claims and that consumer trust and transparency are priorities. "We remain committed to working constructively with the regulator as their inquiry progresses," the spokesperson said. "The CMA is looking into whether Microsoft's communications with customers before renewal were misleading," the regulator said in a statement. The watchdog said it hasn't reached any conclusions yet on whether Microsoft broke U.K. regulations.