Microsoft faces competition probe over Copilot subscription price hike

SOFTWARE

Watchdog asks whether customers were clearly told how to avoid the costlier AI-equipped plans

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." ®