Microsoft Copilot price hike faces UK competition probe

Microsoft faces a UK competition investigation over a Microsoft Copilot price hike that added £25 a year to some consumer Microsoft 365 renewals. The Competition and Markets Authority is examining whether customers were given clear enough information before being moved onto a more expensive plan that included new features such as Copilot.

The issue stems from changes Microsoft made in January 2025 to its consumer Microsoft 365 subscriptions. Existing subscribers were renewed into a higher-priced package containing Copilot unless they changed plan or canceled. Microsoft also offered a cheaper “Classic” plan that kept the older subscription without the new Copilot features.

The CMA said its investigation will assess whether Microsoft’s communications gave customers the information they needed about plan options and price differences before making a decision. The regulator has not concluded that Microsoft breached consumer law, and said the inquiry is at an early stage.

What is the Microsoft 365 Classic plan?

The Microsoft 365 Classic plan is the lower-priced option Microsoft made available to existing consumer subscribers who did not want the added Copilot features. According to the CMA’s account, customers could use it to avoid both the new AI features and the £25 annual increase attached to the Copilot-equipped version.

The case is another test of how large software vendors package AI features into existing subscriptions. For Microsoft, Copilot is a central product push across its software portfolio, but consumer regulators are focused on whether customers can understand what they are buying and how to opt out when pricing changes.

Hayley Fletcher, senior director for consumer protection at the CMA, said that when companies change subscription plans, customers need “clear and timely information” about their choices. She said the investigation will consider whether Microsoft customers were misled and paid more as a result.

The CMA said it supports AI adoption and the benefits it could bring to people in the UK, while emphasizing that customers should not be treated unfairly. That framing matters for the software industry: regulators are not challenging AI features as such, but the way they are bundled, priced and disclosed in recurring consumer subscriptions.

Microsoft told The Register that “consumer trust and transparency” are priorities and that it is reviewing the CMA’s claims. The company said it remains committed to working constructively with the regulator as the inquiry continues.

The UK probe follows earlier political and regulatory scrutiny of the same change. Last year, the UK’s Science, Innovation, and Technology Committee questioned Microsoft about the price increases and the requirement for customers to opt out of the more expensive Copilot plan. Australian regulators later obtained an apology from Microsoft’s local operation for not clearly communicating the cheaper Classic option.

This story draws on original reporting from The Register.