UK CMA opens probe into Microsoft 365 subscription marketing

The UK's antitrust watchdog is examining whether Microsoft misled millions of personal and family subscribers into paying more for Microsoft 365.

The Competition and Markets Authority on Tuesday opened an investigation into Microsoft Corp. over whether its marketing of Microsoft 365 subscription plans misled personal and family customers, potentially causing them to overpay for the productivity software suite.

"People across the UK rely on Microsoft 365, whether they're studying, sending emails or managing household finances," said Hayley Fletcher, senior director for consumer protection at the CMA. "When a business changes its subscription plans, customers need clear and timely information about their options."

The probe centers on changes Microsoft made to its 365 plans from January 2025. Existing subscribers were automatically given access to new features — including the Copilot AI assistant — at no extra cost for the remainder of their subscription period. At renewal, customers were rolled onto a new plan with the same features at a higher price unless they actively selected an alternative or canceled, the regulator said. The CMA said it has not reached any conclusions about whether Microsoft broke the law.

The investigation marks one of the first major tests of the CMA's expanded enforcement powers under the Digital Markets, Competition and Consumers Act, which allows the regulator to act more swiftly against big tech companies. If the probe finds Microsoft breached consumer protection law, the company could face fines and be forced to change its subscription practices in the UK, potentially affecting millions of users.

Three Regulators, One Target

The UK action is part of a broader regulatory push. The Australian Competition and Consumer Commission and the Italian Competition Authority are separately investigating Microsoft over similar concerns about information provided to customers when their subscription plans were renewed, the CMA said. The coordinated scrutiny highlights the global regulatory focus on subscription-based business models, where automatic renewals and price increases have drawn increased attention from consumer watchdogs.

Microsoft 365 is a core product for the company, with hundreds of millions of subscribers globally. The UK represents one of its largest markets outside the US. Any forced changes to pricing or marketing practices in Britain could set a precedent for other jurisdictions examining similar practices.

The CMA's new powers under the Digital Markets, Competition and Consumers Act give it greater authority to investigate and penalize tech companies without lengthy court proceedings. The last time the regulator pursued a major tech subscription case was its 2023 investigation into Adobe's cancellation practices, which led to changes in how the company handled subscription terminations.

What Comes Next

The CMA said its investigation will examine whether Microsoft's communications with customers before renewal were misleading, particularly regarding the price and terms of the new plans. The regulator has not set a timeline for concluding the probe, which could result in enforcement action, formal commitments from Microsoft to change its practices, or a finding of no violation.

For investors, the investigation adds regulatory risk to a business segment that has been a reliable growth driver. Microsoft's productivity and business processes segment, which includes Office subscriptions and commercial cloud services, has consistently delivered double-digit revenue growth. Any disruption to UK subscription practices could have a measurable impact, though the financial implications remain unclear at this stage.

The probe also comes as Microsoft pushes deeper into AI monetization through Copilot integration across its product suite. The CMA's focus on how the company communicated the inclusion of Copilot in its subscription plans could influence how Microsoft packages and prices AI features for consumers going forward.

This article is for informational purposes only and does not constitute investment advice.