The UK Competition and Markets Authority (CMA) has launched an investigation into Microsoft over potential consumer transparency issues surrounding its Microsoft 365 subscription plans. The probe centers on whether the tech giant misled customers about pricing options after integrating new features, including its artificial intelligence tool Copilot, into its Personal and Family packages. The regulator is assessing if users were given clear, upfront information or if they ended up paying higher rates without fully understanding their alternatives.
The issue stems from changes introduced in January 2025, when Microsoft automatically provided existing subscribers access to Copilot and other features at no additional charge for the remainder of their active billing cycle. However, once those subscriptions expired, users were automatically transitioned into upgraded, higher-priced plans containing the new features unless they actively intervened to change or cancel their account. While Microsoft offered a time-limited “Classic” tier allowing existing users to keep their original features at the original price, the newer integrated plans carried a price increase of £25 per year. For instance, the Personal plan rose from £59.99 to £84.99 annually, while the Family plan increased from £79.99 to £104.99 annually. Furthermore, Microsoft ceased offering the lower-cost plans without AI additions to new subscribers entirely.
Central to the CMA’s inquiry is whether Microsoft’s pre-renewal communications clearly detailed these price differences and made customers adequately aware of the Classic option. Hayley Fletcher, Senior Director for Consumer Protection at the CMA, noted that clear and timely information is essential when subscription terms change, especially at a time when household budgets are tight and reliance on software tools for work and daily life is high. She emphasized that while the regulator supports AI adoption, consumer practices surrounding these tools must remain fair and transparent so individuals can make informed decisions.
The CMA stressed that it has not yet reached a conclusion as to whether Microsoft broke the law. Under enforcement powers enacted in April 2025, the regulator can directly rule on consumer law breaches and impose penalties of up to 10 percent of a company’s global turnover without going through the courts. The UK investigation runs parallel to similar regulatory actions overseas, with antitrust authorities in both Australia and Italy currently investigating Microsoft over its subscription renewal practices and communication regarding Copilot integration.