The Competition and Markets Authority has opened an investigation into changes to Microsoft 365 subscriptions after existing customers were directed towards more expensive plans incorporating the company’s Copilot artificial intelligence tools.
The regulator is examining whether customers received clear and timely information about their options, including the ability to retain a lower-priced Classic subscription or cancel before renewal.
From January 2025, existing Microsoft 365 Personal and Family subscribers received access to Copilot for the remainder of their current term. As renewal approached, customers were presented with plans containing the AI service at a higher annual price unless they selected an alternative or cancelled.
The annual Microsoft 365 Personal Classic plan cost £59.99, compared with £84.99 for the Copilot-inclusive version. The Family Classic plan cost £79.99, while the corresponding Copilot plan was £104.99. Both represented a £25 annual difference.
No conclusion has been reached on whether consumer law was breached. The investigation will assess the clarity, prominence, and timing of information given to customers, as well as whether the renewal process resulted in some subscribers paying more than they would otherwise have chosen.
Hayley Fletcher, interim senior director of 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.”
The inquiry is among the first involving a major technology group under the UK’s stronger consumer enforcement regime. Since April 2025, the CMA has been able to determine certain breaches directly rather than taking every case through the courts, with potential penalties reaching 10% of global turnover.
Its direct enforcement work has already secured more than £1.95m in refunds and penalties approaching £6.2m. Subscription design is receiving closer attention because recurring payment models now extend across software, entertainment, telecommunications, fitness, financial services, and retail.
Software companies have traditionally distinguished product tiers through storage, security, collaboration, and support. Generative AI has complicated that model by raising questions over whether new tools should be sold as optional additions, included within existing subscriptions, or used to redefine the standard product at a higher price.
Bundling can accelerate adoption by placing an AI feature before a large installed customer base. It can also cause concern when customers who do not want the service must take action to avoid paying for it. The regulatory question concerns whether the price change and available alternatives were sufficiently clear to support an informed decision.
Renewal communications are central to that assessment. A notice may contain accurate information while still failing to give adequate prominence to the practical consequences, particularly when customers manage several subscriptions or rely on automatic payments.
Regulators increasingly examine the complete customer journey, including default settings, interface design, cancellation routes, renewal reminders, and the visibility of lower-cost alternatives. Small differences in wording or layout can influence whether customers understand that a choice is available.
AI adoption now carries direct customer experience and competition risks alongside its technical requirements. Companies adding AI to established products must account for pricing transparency, data use, service reliability, accessibility, and the expectations created by previous contracts.
Similar scrutiny is developing across digital markets internationally. The CMA’s examination of app store payment restrictions also centres on how product and platform design can influence customer choice and market access.
The case may affect software providers whose commercial plans depend on increasing revenue from existing subscribers. Higher prices can be justified by additional functionality, but customers must be able to understand what has changed, whether they need the new features, and how to retain or leave the previous arrangement.
Microsoft will have an opportunity to respond as the investigation progresses. The regulator could close the case without action, accept commitments, or determine that changes are required. Any formal finding would be closely watched across the software market because many providers are incorporating generative AI into products already sold through recurring subscriptions.
The eventual outcome could influence how those companies structure default renewals, present alternative plans, and communicate AI-related price increases to established customers.
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