Microsoft is facing a fresh consumer-protection investigation in the United Kingdom over the way it marketed higher-priced Microsoft 365 subscriptions bundled with its Copilot AI assistant, raising regulatory concerns about its strategy to generate recurring revenue from AI-powered features.

The UK’s Competition and Markets Authority is examining whether Microsoft provided customers with clear and transparent information before changing its Microsoft 365 Personal and Family subscription plans in January 2025.

Existing subscribers initially received Copilot and other new features at no extra cost but were automatically moved to more expensive plans upon renewal unless they actively chose an alternative plan or cancelled their subscription.

Microsoft also offered a time-limited “Classic” subscription option for existing users.

The price difference is significant. Microsoft 365 Personal costs $84.99 per year with Copilot and additional features, compared with $59.99 for the Classic plan, while the Family plan costs $104.99 versus $79.99 for the Classic version.

“Our investigation will consider whether Microsoft customers were misled and ended up paying more as a result,” said CMA Consumer Protection Director Hayley Fletcher.

The CMA stressed that it has not concluded Microsoft breached consumer law.

The regulator will continue gathering evidence through December and is expected to provide another update before the end of the year.

The investigation carries broader implications beyond potential customer refunds.

Under UK consumer law, the CMA can impose fines of up to 10 per cent of a company’s global turnover for violations.

Meanwhile, regulators in Australia and Italy are also examining Microsoft’s communications around its subscription changes.

The growing regulatory scrutiny could force Microsoft to make AI subscription bundles easier for customers to opt out of, potentially affecting one of its key strategies for monetising Copilot.