Microsoft faces competition probe over Copilot subscription price hike
Microsoft is being investigated by the UK's Competition and Markets Authority (CMA) over concerns that customers were misled when the company added Copilot AI features to Microsoft 365 subscriptions and raised prices. The probe centres on whether Microsoft gave customers clear and timely information about cheaper alternatives before they were automatically moved onto costlier plans at renewal, an issue that matters because it touches millions of subscribers and could set a precedent for how tech firms bundle AI features into existing services.
The changes date back to January 2025, when Microsoft added Copilot and other features to its consumer package; at renewal, customers were shifted onto a pricier tier unless they actively switched to a cheaper "Classic" plan or cancelled, with staying on the AI-equipped version costing £25 more a year. The CMA, whose consumer protection director Hayley Fletcher says the inquiry will examine whether customers "ended up paying more" without clear choice, follows similar scrutiny from a UK parliamentary committee and an apology extracted from Microsoft's Australian arm over the same issue. Microsoft says it is reviewing the CMA's claims and will work with the regulator, while the investigation remains at an early stage with no finding yet that consumer law was broken.
In short
- CMA probes whether Microsoft hid cheaper Copilot-free Microsoft 365 plans
- Customers auto-moved to pricier AI tier, costing £25 more yearly
- Follows earlier UK parliamentary questioning and an Australian apology
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
The CMA has a strong case for examining whether customers received clear, timely notice of the price increase and a practical chance to choose a cheaper plan before renewal. Automatic moves to a more expensive subscription can undermine informed choice, especially when the change affects millions and the lower-cost option requires customers to act; scrutiny could also clarify expectations for how firms introduce paid AI features.
The case against
Microsoft can argue that adding Copilot and other features changed what the subscription offered, and that customers should be able to choose whether those additions are worth the higher price. If the cheaper Classic plan and cancellation option were adequately disclosed in time, automatic renewal may have been a manageable way to update existing plans rather than evidence of unfair treatment. The inquiry is at an early stage, so whether customers were actually misled remains unresolved.
Explained simply
Microsoft has added Copilot, an artificial intelligence tool that helps with writing and other tasks, to its Microsoft 365 subscription package and increased the subscription price. The issue under investigation is whether customers were given clear enough information about cheaper alternatives before being automatically switched to the more expensive plan when their subscriptions renewed.
The matter affects millions of subscribers and raises broader questions about how technology companies bundle new features into their existing services. When Microsoft made the change in January 2025, customers were switched to a pricier tier unless they actively chose to stay on a cheaper plan or cancel their subscription entirely. The annual cost increase was £25 per year for many users.
Britain's Competition and Markets Authority is investigating whether Microsoft broke consumer protection laws by failing to provide customers with sufficient information about their options. Microsoft says it is cooperating with the regulator and reviewing the concerns, though the investigation is still at an early stage. The company has already apologised to customers in Australia over the same issue.