UK regulator is investigating whether Microsoft provided misleading information to 365 customers regarding increases in Copilot pricing.

      Britain's Competition and Markets Authority (CMA) has initiated an investigation into Microsoft's sales practices for its 365 subscriptions, specifically looking into whether the company deceived personal and family users by increasing prices and including its Copilot AI assistant as part of the bundle. The CMA revealed the inquiry on July 29, focusing on the marketing strategies of the plans rather than the technology itself.

      This adds to a list of challenges that Microsoft faces in the UK. The company is already under scrutiny from the CMA regarding its strategic market status in relation to its business software, as part of a broader examination of how Amazon and Microsoft dominate the cloud computing sector in the UK.

      The subscription issue began in early 2025 when Microsoft incorporated Copilot into its 365 Personal and Family plans at no additional charge partway through subscriptions. However, upon renewal, it transitioned customers to new, more expensive plans that included the assistant unless they opted to decline. Although a cheaper option was available, it was not prominently visible. Customers who wished to avoid the higher cost could switch to a "Classic" plan without Copilot, but Microsoft ceased offering these plans to new customers, and according to the CMA, did not adequately inform existing customers of this alternative.

      The price disparity is central to the matter. In the UK, an annual Personal plan with Copilot costs £84.99, while the Classic version is priced at £59.99, resulting in a £25 increase that the regulator believes customers may not have fully comprehended. The Family plan experienced a similar adjustment, also gaining Copilot and a higher renewal price, thereby affecting a substantial number of UK households with 365 subscriptions.

      The CMA's focus is on transparency rather than the AI component itself. The concern is whether Microsoft provided customers with clear and timely information regarding their options at the renewal stage, which is when the default shift to the more expensive plan is most influential. Hayley Fletcher from the CMA emphasized that when businesses alter their subscription plans, customers require clear and timely details about their choices, highlighting the issue as one of consumer rights rather than the quality of the Copilot feature.

      It's important to note the legal context. The investigation is based on existing consumer protection laws concerning unfair commercial practices rather than the newer Digital Markets, Competition and Consumers Act, which grants the CMA stronger authority over the largest platforms.

      This subscription issue is more focused and personal compared to the broader inquiries into cloud computing, as it deals with everyday billing and the subtle way in which a renewal can end up costing more than anticipated. Microsoft is currently contending with multiple challenges in the UK, including a separate £1 billion cloud-licensing lawsuit, making this subscription investigation an additional issue for the company already navigating through the UK court and regulatory systems.

      The trend of auto-renewing subscriptions has become a target for regulators globally. Consumer advocacy groups in various countries have become cautious of the "set it and forget it" model, where price increases and new features are automatically applied without explicit customer consent.

      Microsoft has not provided any comments regarding the CMA's announcement. The regulator has not accused the company of legal violations but has simply opened an investigation, with any conclusions or actions to follow later. Should issues be identified, the CMA’s potential actions could include mandating changes in how Microsoft presents renewals or providing compensation for customers, although such measures would follow extensive investigation work.

      Currently, the case serves as a signal: bundling AI with products that consumers already subscribe to has emerged as a popular strategy in the industry, and Britain's regulator is assessing whether customers were adequately informed and given a fair opportunity to refuse such bundled offerings.