The Competition and Markets Authority (CMA) has launched an investigation into Microsoft following concerns that customers may not have been given clear information upfront about subscription options when changes were made to Microsoft 365 Personal and Family plans, including the addition of new features such as Copilot. From January 2025, Microsoft automatically gave existing customers access to new features, such as Copilot, at no extra cost for the remaining subscription period. When the subscription ended, customers were automatically rolled on to a plan with the additional features at a higher price, unless they took steps to either choose another plan or end their subscription. Microsoft stopped offering Personal and Family plans without these new features to new subscribers.
For existing customers on Personal and Family plans, Microsoft introduced a time-limited option to switch to a ‘Classic’ plan. Classic plans offered customers the same features they had access to before the changes, at the same price. For annual Microsoft 365 Personal and Family plan customers, the new plan was £25 a year more than the Classic versions of these plans.
The CMA is looking at Microsoft’s communications with customers before renewal. In particular, it is examining whether customers were given key information about the plans and the difference in cost, so they could understand the options available to them before making a decision.
At this stage, the CMA has reached no conclusions about whether consumer laws have been broken.
International action
The Australian Competition and Consumer Commission and the Italian Competition Authority are separately investigating Microsoft entities in relation to the information provided to customers when plans renewed.
Subscriptions and digital content versus digital services
As well as this, the Court of Justice of the European Union recently issued its decision in Sky Österreich Fernsehen (Case C‑234/25). It held that a streaming subscription may constitute a digital service, rather than the supply of digital content, where the service is sufficiently dynamic and adapts to user behaviour.
Sky Österreich offers streaming subscriptions allowing users to access sports, television and other content online. Customers subscribing online were required to accept a contractual term stating that performance would begin immediately and that, consequently, they would lose their statutory right to withdraw from the contract within 14 days. A consumer protection association challenged that practice. The key issue was whether Sky was supplying digital content, in which case the withdrawal right could potentially be lost once performance began with the consumer’s consent, or a digital service, in which case the withdrawal right could not be excluded in the same way.
The CJEU held that a service allowing users to access streamed content via hyperlinks or apps does not automatically constitute digital content. Instead, where the offering is dynamic and goes beyond the stable provision of specific content, it may qualify as a digital service. The Court highlighted several features that point towards classification as a digital service:
• monitoring of users’ viewing behaviour;
• creation of playlists or favourites;
• personalised recommendations;
• adaptation of content offerings based on user behaviour or expectations;
• features designed to influence how users engage with the service.
The Court emphasised that the distinction should be drawn according to the degree of the provider’s involvement during the supply of the digital data. The more active, adaptive and personalised the service becomes, the more likely it is to be characterised as a digital service rather than simply as the supply of digital content. Applying that reasoning, the Court suggested that Sky’s streaming service appears to be a digital service because it offers a broad range of content, continually updates that content and provides personalised recommendations based on user behaviour. However, it will be up to the Austrian court to make the final decision.
