Microsoft, Copilot and subscription transparency: CMA opens new consumer protection investigation

The latest UK Competition and Markets Authority (CMA) investigation has recently been announced, this time looking into Microsoft’s marketing of certain Microsoft 365 subscription plans.

This marks another example of the regulator’s growing focus on subscription services. The investigation comes at a time when many businesses are integrating new AI-powered features into existing products and reconsidering how those enhancements are priced and presented to customers. 

While the investigation centres on Microsoft’s consumer-facing Microsoft 365 Personal and Family subscriptions (i.e. those which provide consumers across the UK with access to Word, Excel, PowerPoint and Outlook), the issues raised will be familiar to any business offering subscription-based products or services.

What is the CMA investigating?

The CMA is examining changes Microsoft made to its Microsoft 365 Personal and Family plans following the introduction of new features, including Copilot, in January 2025. According to the CMA, existing customers on these plans were automatically given access to the new functionality during their current subscription period. When those subscriptions renewed, customers were automatically moved onto a higher-priced plan containing the new features unless they chose an alternative option or cancelled. 

For existing customers on Microsoft 365 Personal or Family plans, Microsoft also introduced a time-limited “Classic” plan that retained the previous functionality at the previous price. The CMA notes that, for annual Microsoft 365 Personal and Family subscribers, the new plans cost £25 more per year than the corresponding Classic plans.

The central question for the CMA is whether consumers were given sufficiently clear information about their options and the price differences before deciding whether to renew. 

Looking ahead

The investigation reflects a broader trend in consumer protection enforcement. The CMA has increasingly scrutinised subscription-based business models, including through its recent investigation into Adobe's cancellation practices. The investigation comes as businesses prepare for the new subscription contract regime under the Digital Markets, Competition and Consumers Act 2024 (DMCCA), which is expected to take effect in Spring 2027. We previously explored the implications of those changes here.

For many businesses, adding new features, improving products and increasing prices are routine commercial activities. However, difficulties can arise where customers are automatically migrated to different plans, renewal arrangements become more complex, or alternative options are not sufficiently prominent.

The CMA's latest investigation suggests that it is not only the substance of a subscription offering that matters, but also how choices are presented to consumers. As businesses continue to introduce AI-enabled functionality and evolve their pricing models, they should expect increasing scrutiny of whether customers are given clear information about the options available to them and the costs associated with those options. The outcome of the investigation will be closely watched by businesses across a range of sectors, particularly those that rely on subscription-based products and services.