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

Britain's Competition and Markets Authority has opened an investigation into whether Microsoft misled 365 Personal and Family customers when it raised prices and bundled in its Copilot AI assistant. The CMA announced the probe on 29 July, focusing on whether Microsoft gave customers clear and timely information about their options at renewal, when the price of an annual Personal plan rose from £59.99 to £84.99. "When a business changes its subscription plans, customers need clear and timely information about their options," said Hayley Fletcher of the CMA.

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 https://thenextweb.com/news/cma-microsoft-sms-investigation-business-software into its business software, part of a wider look at how Amazon and Microsoft https://thenextweb.com/news/uk-investigates-amazon-microsoft-cloud-services 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 https://thenextweb.com/news/microsoft-faces-1b-cloud-licensing-lawsuit-in-the-uk 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. Get the TNW newsletter Get the most important tech news in your inbox each week.