The CMA investigates Microsoft for unfair subscription practices

The Competition and Markets Authority (CMA) recently launched an investigation into Microsoft following concerns that customers were not given sufficiently clear information up front about their subscription options when changes were made to the Microsoft 365 Personal and Family plans.

Solicitor Pippa Garden explores the basis for the CMA’s investigation into Microsoft and explains the CMA’s requirements for subscription contracts.  

Did Microsoft breach consumer legislation?

In January 2025, Microsoft carried out an upgrade to their plans, introducing new features such as Copilot. Existing users were allowed to access the upgrades at no additional cost for the remainder of their subscription period. However, when their subscription period ended, customers were automatically enrolled onto the upgraded plan, which included the new features at a significantly higher price (£25 a year more).

To return to a cheaper plan, customers had to take active steps at the end of their subscription period to switch back, and in some instances, they’d have to do so within certain time constraints.

The CMA is now looking into whether Microsoft's communications with customers during their subscription renewal period were misleading. The investigation will examine whether customers were given sufficient information about the plans available to them, including the difference in cost of the plans, so they could properly understand their options and make an informed decision.

At this stage, the CMA have not reached a conclusion as to whether Microsoft have breached any consumer legislation. They have, however, used this as an opportunity to reiterate that whilst they are supportive of the rollout of AI, customers must be given clear information to allow them to consider their options and make informed choices about which AI product works best for them.

The CMA’s requirements for subscription contracts

Businesses offering subscription-based payment methods must make sure that they are consumer law-compliant.

The Digital Markets Competition and Consumers Act 2024 (DMCCA) sets out a variety of rights for consumers in relation to subscription contracts. The CMA has made it clear that it intends to investigate any allegation that businesses are failing to comply with the subscription requirements and to come down hard on any offenders.

As a minimum, the CMA expects businesses to:

• Ensure it is straightforward for consumers to exit subscription contracts (ideally it should be as easy to exit a subscription contract as it is to enter one);
• Allow consumers to exit a subscription contract online if they signed up to it online; and
• Offer a 14-day cooling off period after a trial of 12 month+ contract auto-renews (during which the consumer can cancel without penalty).

If you wish to discuss whether your subscriptions are DMCCA compliant, or consumer law issues more generally, please contact David Wozniak on [email protected] or 0191 211 7831.