UK CMA Investigates Microsoft Over Copilot Subscription Changes

Key Takeaways

• CMA Probes Microsoft 365 Renewals: The UK's Competition and Markets Authority has opened a consumer protection investigation into whether Microsoft provided clear information to customers when renewing Microsoft 365 Personal and Family subscriptions after adding Copilot and other AI features.
• Higher-Priced Plans Under Scrutiny: The regulator will examine whether customers understood they would automatically renew onto more expensive plans unless they actively chose a lower-priced Classic plan or canceled their subscription.
• No Findings of Wrongdoing: The CMA emphasized that it has not concluded Microsoft breached consumer protection law. The investigation is focused on whether the company's communications before renewal were misleading.

Deep Dive

When Microsoft folded Copilot into its Microsoft 365 subscriptions last year, the change arrived quietly enough. Existing customers on Personal and Family plans suddenly found themselves with new AI features at no extra cost for the remainder of their subscriptions. The real decision came later, when renewal notices began arriving and the free addition became a more expensive default.

That moment is now at the center of a consumer protection investigation by the UK's Competition and Markets Authority, which announced Wednesday that it is examining whether Microsoft adequately explained those changes before customers renewed their subscriptions.

The regulator's concern is not that Microsoft added artificial intelligence to Word, Excel, PowerPoint and Outlook. Nor is it questioning whether customers should want Copilot in the first place. Its focus is narrower and, in some ways, more fundamental. When the renewal date arrived, did customers understand what they were buying, what it would cost, and that they had other options?

Beginning in January 2025, Microsoft automatically enabled new features, including Copilot, for existing Microsoft 365 Personal and Family subscribers without increasing the price for the remainder of their subscription periods. Once those subscriptions expired, however, customers were automatically moved onto higher-priced plans containing the additional features unless they actively selected another plan or canceled their subscriptions.

At the same time, Microsoft stopped offering new subscribers versions of the Personal and Family plans without the additional AI features. Existing customers were given a limited opportunity to switch to "Classic" plans that preserved the features they already had at the same price they had been paying.

The price differences were not insignificant. A Classic Microsoft 365 Personal subscription costs £59.99 a year, while the version with the additional features costs £84.99. For Family plans, the annual price rises from £79.99 for the Classic version to £104.99 for the plan that includes the new capabilities. Monthly subscribers faced similar increases.

The CMA said its investigation will examine whether Microsoft's communications before those renewals clearly explained the available subscription choices and the differences in price. The regulator emphasized that it has not reached any conclusions about whether Microsoft broke consumer protection law.

Hayley Fletcher, the CMA's Senior Director for Consumer Protection, said the investigation comes at a time when many households are paying close attention to recurring expenses and increasingly relying on AI-powered products.

"When a business changes its subscription plans, customers need clear and timely information about their options," Fletcher said. "Our investigation will consider whether Microsoft customers were misled and ended up paying more as a result."

The case lands at an awkward intersection where artificial intelligence meets one of the oldest questions in consumer protection: what exactly did the customer agree to buy? AI may be new, but subscription renewals are not, and regulators have spent years scrutinizing the line between convenience and inertia. As software companies increasingly bundle AI into products people already use every day, that line is likely to receive even closer attention.

The investigation also reflects a broader pattern taking shape beyond the UK. Australia's Competition and Consumer Commission has already commenced proceedings in Federal Court alleging Microsoft misled customers about subscription options and price increases after integrating Copilot into Microsoft 365. Italy's Competition Authority is conducting its own investigation into whether Microsoft provided consumers with sufficient information to assess the service changes before renewing and whether aspects of the company's conduct amounted to an aggressive commercial practice.

For the CMA, the case is also an early test of expanded authority. Since April 2025, the regulator has held direct consumer enforcement powers, allowing it to determine whether consumer law has been breached without first taking companies to court. The authority says it has already secured more than £1.95 million in customer refunds and imposed nearly £6.2 million in fines under those powers.

Should the regulator ultimately conclude that Microsoft infringed consumer protection law, it could impose penalties of up to 10% of the company's global turnover, or £300,000 where that amount is higher under the statutory framework.

For now, however, the investigation remains just that. The CMA has made no finding of wrongdoing. Its task is to determine whether customers renewing a familiar subscription were given enough information to make what should have been a simple choice, rather than discovering only afterward that the software they thought they knew had quietly become something else.

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