Law & Regulation

The Cheaper Plan Was Behind the Cancel Button

The UK CMA is investigating how Microsoft sold 365 renewals after bundling Copilot. The allegation is not the price rise. It is that the cheaper plan existed and was never named.

Law & RegulationBy Servola Tech Desk2026-07-295 min read

AI-assisted, edited by humans. | Editor-in-Chief: Leon Soliman | Editorial standards

The Cheaper Plan Was Behind the Cancel Button

Key takeaways

The UK Competition and Markets Authority opened an investigation into Microsoft on 29 July over how it sold Microsoft 365 renewals after adding Copilot, and the allegation is not that the price went up but that a cheaper plan existed and was not named in the renewal notice.
In the UK the gap is 25 pounds a year on both consumer tiers: Personal Classic is 59.99 against 84.99 with the new features, and Family Classic is 79.99 against 104.99.
Australia's competition regulator has been in Federal Court since 27 October 2025 alleging that about 2.7 million subscribers were shown two options when there were three, and that the third only appeared once a customer had started to cancel.
The CMA is using ordinary unfair commercial practices law rather than the Digital Markets, Competition and Consumers Act, so the standard being tested applies to any subscription business, not only to large platforms.

A renewal notice that offered two doors

The email did what renewal emails do. It explained that Microsoft 365 now included Copilot, that the plan would renew at a higher price, and that the subscriber could accept the change or cancel. Two doors, clearly marked, and a date by which to choose.

There was a third door. Microsoft had kept a set of Classic plans that carried the old features at the old price, and a subscriber who wanted one could have it. What the renewal communications did not do, according to the case now filed against the company in Australia, was mention that the Classic plans existed. They became visible after a customer began the cancellation process.

On 29 July the UK Competition and Markets Authority opened its own investigation into the same conduct in Britain. It is examining whether customers were given the key information about the plans and the difference in cost that they needed in order to understand their options before deciding. The regulator has reached no conclusion, and Microsoft has not been found to have broken any law.

The complaint is about the omission, not the increase

Nobody is arguing that Microsoft was obliged to hold its prices. A vendor may add a feature and charge for it, and a vendor may retire an old tier. What three separate authorities are now testing is narrower and more awkward: whether a renewal notice that presents accept-or-cancel is misleading when a third, cheaper option is sitting behind the cancel button.

The Australian filing puts numbers on it. The Australian Competition and Consumer Commission went to the Federal Court on 27 October 2025 over communications sent to roughly 2.7 million subscribers, and it named three specific items: a blog post on 31 October 2024 and emails on 9 January and 13 April 2025. Personal went from 109 to 159 Australian dollars a year, Family from 139 to 179. Chair Gina Cass-Gottlieb said Microsoft omitted reference to the Classic plans and concealed their existence until after subscribers initiated the cancellation process. The regulator is seeking penalties, injunctions, consumer redress and costs.

Italy's competition authority has been examining whether Microsoft gave consumers enough information to assess the change. Three jurisdictions, three legal systems, and the same allegation in each: the option that cost least was real and was not offered.

The law being used reaches further than the AI

The detail that matters most for anyone selling a subscription is which statute the CMA reached for. It did not open this under the Digital Markets, Competition and Consumers Act, the regime built for firms with strategic market status. It opened it under ordinary law on unfair commercial practices.

That choice removes the comfortable reading. A case brought under the digital markets regime would say something about Microsoft's size and very little about anyone else. A case brought under general consumer law says that the standard applies to the renewal email itself, whoever sends it. Bundling an AI feature into an existing plan and re-pricing at renewal is now a documented pattern with a live regulatory test attached, and the test is about disclosure rather than market power.

What to do before your own renewal date

The buyer-side lesson is blunt and worth acting on this week. When a supplier writes to say your plan now includes an AI assistant and the price changes accordingly, treat the two options in the letter as the options the supplier chose to print, not as the full set. Ask in writing whether a tier exists that carries your current features at your current price. In this instance one did, on both the Personal and the Family plan, at 25 pounds a year less.

For anyone who sells on subscription, the exposure runs the other way. Retention flows are usually designed so that the cheapest offer appears at the moment of highest intent to leave, which is a rational way to protect margin and is exactly the design three regulators are now examining. The question to put to your own renewal journey is simple: is there a price we would honour if asked, that we do not mention until someone tries to go? If the answer is yes, that gap is no longer just a growth tactic.

Yes, but: an investigation is not a finding

The CMA has been explicit that it is at an early stage and has not established that Microsoft broke consumer law. Investigations close without action, and the Classic plans were genuinely available to anyone who found them. Microsoft also gave existing subscribers the new features at no extra cost until their renewal fell due, which is not the behaviour of a company trying to bill quietly.

None of that changes the operational point. Whatever the CMA concludes about Microsoft, the standard now being argued in three places is that a business changing its subscription plans owes customers clear and timely information about the options before they decide. That is a design requirement, and it applies at the next renewal cycle rather than at the end of the litigation.

Frequently asked questions

Does this mean Microsoft 365 prices will come down?

No. None of the three authorities is challenging Microsoft's right to set prices or to charge for Copilot. They are challenging whether the cheaper Classic option was properly disclosed at renewal. Even a finding against Microsoft would be about information and possible redress, not a price cap.

Can I still get a Classic plan in the UK?

Microsoft offered Classic as a limited-time route for existing subscribers rather than a permanent tier, so availability depends on your plan and timing. The practical step is to ask your supplier directly, in writing, whether a version of your plan exists without the new features at the previous price, and to keep the answer.

Does this affect business subscriptions or only consumer ones?

The investigations concern the consumer Personal and Family plans. The reason it still matters commercially is the law being used: the CMA is applying general unfair commercial practices rules rather than the digital markets regime, so the disclosure standard being tested is not confined to one vendor or one market.

The price rise was never the interesting part. What three regulators have converged on is a question about where a company files the option its customers would have chosen, and that question has an answer inside almost every subscription business. Read your own renewal notice as a customer would, and count the doors it offers.

MicrosoftCMAACCCMicrosoft 365CopilotSubscription pricingConsumer law

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