CMA investigates Microsoft for possible deceptive pricing of 365 with Copilot

What happened?

On July 29, 2025, the UK's Competition and Markets Authority (CMA) announced a formal investigation into Microsoft's practices when selling its Microsoft 365 subscriptions. The regulator is examining whether the company misled individual and family customers by increasing prices while also integrating its AI assistant Copilot by default, without offering a clear option to purchase the plan without the add-on. The investigation focuses on the marketing of the plans, not the technology itself. According to the CMA, it will assess whether Microsoft has breached consumer protection regulations, specifically regarding unfair commercial practices and lack of transparency. The investigation was initiated following complaints from consumers and organizations that pointed out that the price increase (up to 30% in some plans) coincided with the forced inclusion of Copilot, without users being able to opt for a cheaper version without AI.

Why is this important?

This case is crucial because it sets a precedent for how big tech companies can bundle AI products into existing subscriptions. If the CMA determines that Microsoft acted deceptively, it could force the company to offer plans without Copilot at a lower price, affecting millions of users in the UK and potentially globally. Moreover, the decision will influence how other companies (Google, Adobe, Salesforce) integrate AI assistants into their products. For example, Google has already added Gemini to its Google Workspace subscriptions, and Adobe has integrated Firefly into Creative Cloud. If the CMA rules against Microsoft, it could establish a regulatory standard requiring transparency in pricing and opt-out options for AI features, which would change the dynamics of the software subscription market.

Consequences and historical context

This is not the first time Microsoft has faced scrutiny over its bundling practices. In the 1990s, the US antitrust case against Microsoft for integrating Internet Explorer into Windows laid the groundwork for tech regulation. Now, with generative AI, similar questions arise: can a dominant company force users to pay for a feature they may not want? The CMA's investigation could result in fines, changes to contracts, or even the requirement to offer versions without Copilot. Historically, the CMA has been active in regulating big tech: in 2023 it investigated Google for its practices in the digital advertising market, and in 2024 it fined Apple for restricting competition in mobile payments. This case adds to a global trend of increased scrutiny over AI bundling. The European Union, under the Digital Markets Act, has already shown interest in similar practices and may follow the CMA's lead. For Microsoft, the consequences could be significant: in addition to possible fines (up to 10% of global revenue), the company could be forced to redesign its subscription plans, offering an option without Copilot at a lower price, which would affect its recurring revenue. According to analysts, Copilot has been a key factor in justifying price increases for Microsoft 365, and an adverse decision could force Microsoft to separate the product, reducing the perceived value of its AI ecosystem.

What should readers know?

• If you are a Microsoft 365 Personal or Family user, you may have experienced a price increase without clear prior notice about the inclusion of Copilot. For example, the Personal plan went from 69.99 to 99.99 euros per year in some markets, and the Family plan from 99.99 to 129.99 euros.
• The investigation is in its early stages; there are no conclusions yet. However, those affected can submit complaints to the CMA through its website. The CMA has requested public comments until September 30, 2025.
• Microsoft has defended its position by arguing that Copilot adds value and that prices reflect product improvements. In a statement, the company said: "Copilot offers unique AI capabilities that enhance productivity, and we believe our pricing is fair and transparent."
• This case could accelerate stricter regulations on pricing transparency for subscriptions with integrated AI. In the UK, the CMA has already proposed new guidelines for marketing AI products, which could come into effect in 2026.

Impact analysis

The CMA's decision will not only affect Microsoft but will set a global precedent. The European Union has already shown interest in similar practices, and it is likely that the European Commission will launch its own investigation if the CMA rules against Microsoft. For AI startups, it could mean a more competitive environment if they are required to separate base products from AI add-ons. On the other hand, big tech companies could be forced to be more transparent in their pricing strategies, which would benefit consumers. However, there is also the risk that companies may opt to raise prices across the board to compensate for the loss of revenue from forced AI sales. In the labor market, the integration of Copilot has already sparked debates about task automation and the future of work. If regulation limits forced AI adoption, it could slow its penetration in the business sector, giving workers time to adapt. In summary, the CMA's investigation is a milestone in AI regulation, with implications that go beyond Microsoft and the UK. The coming months will be key in defining how to balance innovation and consumer protection in the era of generative AI.