Microsoft Faces Growing Scrutiny Over Copilot Subscription Price Increases

Microsoft is facing a UK consumer investigation over whether customers were misled into paying more for Microsoft 365 subscriptions after its Copilot AI assistant was added to the service.

The probe follows similar action in Australia, where the ACCC last year launched Federal Court proceedings alleging Microsoft misled around 2.7 million Microsoft 365 customers by failing to disclose cheaper Classic plans without Copilot. Microsoft later apologised for its communications and offered refunds, but the court case remains ongoing.

Now in the UK, the Competition and Markets Authority (CMA) is examining whether Microsoft gave Personal and Family subscribers clear and timely information about changes to their plans, renewal prices and cheaper alternatives.

Microsoft added Copilot and other AI features to consumer Microsoft 365 subscriptions in January 2025. Existing customers initially received the features without an additional charge but were later automatically moved to more expensive Copilot-equipped plans when their subscriptions renewed.

Customers could avoid the increase by switching to a cheaper ‘Classic’ plan without Copilot or cancelling their subscription. However, the CMA is investigating whether those options were communicated clearly enough before renewal.

Remaining on the Copilot-equipped plan reportedly cost UK subscribers an additional £25 (A$48) per year.

“When a business changes its subscription plans, customers need clear and timely information about their options,” CMA senior director of consumer protection Hayley Fletcher said.

“Our investigation will consider whether Microsoft customers were misled and ended up paying more as a result.”

Microsoft said consumer trust and transparency were priorities and that it was reviewing the regulator’s claims.

“We remain committed to working constructively with the regulator as their inquiry progresses,” a Microsoft spokesperson said.

The CMA stressed that the investigation was at an early stage and it had not concluded that Microsoft breached consumer law.

The regulator can impose fines of up to 10% of a company’s global revenue if violations are established.

Australian and Italian regulators are also examining information provided to Microsoft 365 customers when subscriptions renewed.

The investigation comes as Microsoft prepares to launch a Copilot ‘super app’ combining its consumer, workplace, coding and autonomous agent features later this year.