Microsoft is facing a widening regulatory challenge over its decision to bundle artificial intelligence tools into its flagship Microsoft 365 subscriptions, after Britain’s competition watchdog launched a formal investigation into whether millions of customers were given enough information about price increases.
The Competition and Markets Authority (CMA) said it was examining whether Microsoft adequately explained changes made to its Personal and Family plans when the company introduced its Copilot AI assistant earlier this year.
Microsoft 365, used by millions of consumers and businesses worldwide, includes some of the technology industry’s most widely used productivity tools, including Word, Excel, PowerPoint and Outlook.
The dispute centres on changes introduced in January 2025, when Microsoft added Copilot and other AI features to existing subscriptions at no extra cost for the remainder of customers’ current billing periods.
However, once that period ended, some subscribers were automatically moved onto more expensive plans unless they actively selected another option or cancelled their subscription.
For annual subscribers, the change represented an increase of around £25 a year.
The CMA is investigating whether customers were clearly informed about the changes, the available alternatives and the potential increase in costs before renewal.
Hayley Fletcher, the CMA’s senior director for consumer protection, said consumers needed clear information when companies changed subscription models.
“When a business changes its subscription plans, customers need clear and timely information about their options,” she said, adding that the regulator would examine whether customers were misled and paid more as a result.
Microsoft said it was reviewing the claims and remained committed to working with the regulator.
“Consumer trust and transparency are priorities for Microsoft,” a spokesperson said.
The UK investigation adds to growing international scrutiny of how major technology companies are integrating AI into existing products.
Australian regulators have already taken legal action against Microsoft, alleging millions of subscribers were misled over Copilot-related pricing changes and that a cheaper alternative plan was not sufficiently visible.
Italy’s competition authority has also opened proceedings examining similar concerns.
The investigations highlight a broader regulatory challenge facing the technology sector: whether powerful software companies can introduce major AI upgrades without leaving consumers struggling to understand what they are paying for.
As artificial intelligence becomes embedded into everyday digital services, regulators are increasingly focused not only on the technology itself, but on the commercial models being built around it.
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