Bundling AI into a subscription just became a live regulatory question
The UK Competition and Markets Authority is investigating whether Microsoft 365 customers were given clear enough information when Copilot functionality was folded into their existing plans, and whether that left customers paying more without a genuine choice. No finding has been made. But the pattern under scrutiny, an AI feature added to a subscription in a way that reshapes price and terms, sits behind a lot of SaaS renewal notices right now, not just Microsoft’s.
On 29 July 2026 the UK Competition and Markets Authority opened an investigation into whether Microsoft 365 customers were given sufficiently clear information about their subscription options after changes that brought Copilot functionality into existing plans. The concern is straightforward to state and hard to fully rule out in most SaaS businesses: did customers know what they were choosing, and did they end up paying more because they did not.
What actually triggered the investigation
Whether customers had clear enough information about their Microsoft 365 subscription options once Copilot was added to existing plans.
Microsoft rolled Copilot, its generative AI assistant, into Microsoft 365 Personal, Family and certain business plans during 2024 and 2025, in some markets alongside price rises on the affected tiers. Customers who wanted to keep their existing plan without the AI features had, in various markets and at various points, to actively find and select a “classic” or non-AI option rather than simply continuing on their prior terms.
The CMA’s investigation is examining whether that journey, the renewal notice, the pricing communication, the visibility of a lower-cost or unchanged alternative, gave customers what they needed to make an informed decision, or whether the AI upgrade was presented in a way that obscured the choice and the cost.
This is not, at this stage, a finding that Microsoft did anything wrong. It is a formal investigation under UK consumer protection law, opened because the regulator considers there is a case worth examining in detail.
What “misleading” means here
A misleading omission does not require a false statement. Leaving out or burying material information a customer needs to decide is enough.
UK consumer protection law, most recently restated in the Digital Markets, Competition and Consumers Act 2024, does not require a trader to say something false to fall foul of it. A misleading omission is enough: leaving out, hiding, or presenting in an unclear, unintelligible, ambiguous or untimely way information the average customer needs to make an informed transactional decision.
In a subscription context that reaches things most product and marketing teams do not think of as legal risk: a renewal email that mentions new features prominently and a price change in small print, a default selection that quietly moves the customer to the higher tier, or a product description that blurs what the new plan includes against what the old one did.
You do not need to say something false to mislead a customer about a subscription change. You only need to make the true information hard enough to find.
Why this matters even if you have never touched Microsoft 365
The commercial pattern under scrutiny is common across SaaS, not specific to one vendor. Add a generative AI feature to a plan that already has paying subscribers, decide whether it is opt-in, default, or bundled at a new price, and write a renewal notice explaining it. Almost every SaaS company that has shipped an AI feature in the last two years has made those same three decisions, usually inside a product and growth team, rarely with legal sign-off on the customer-facing language.
The CMA’s own remit reaches UK consumers and UK-facing commercial practice generally, not one company. An active investigation into the market’s largest productivity suite is also, in effect, a signal to every other SaaS provider that the regulator now has a template for how it will assess AI bundling in subscription products. Waiting for your own complaint before reviewing your renewal flow is the expensive way to find out where the line sits.
What to check in your own renewal and upgrade flow
- Does the renewal notice state plainly what has changed and why the price moved, in the body of the message, not only in a linked terms document.
- Does a lower-cost or unchanged option stay genuinely visible and selectable, or does the flow default the customer into the AI-enabled tier and require effort to opt out.
- Does the product description describe the AI feature accurately, including what it does and does not do, rather than marketing language that overstates capability.
- Is the price change presented next to the feature change, so a customer can see cost and benefit together rather than the benefit alone.
- Would a reasonably attentive customer understand, in one read, what they are being asked to accept, without needing to cross-reference a separate pricing page or FAQ.
What to put in the contract and the commercial process
Feature bundling should never be allowed to obscure the difference between the existing offering and the upgraded one.
Contract and commercial teams should treat the renewal, variation and pricing mechanisms in a subscription agreement as the place where this risk actually lives, not the marketing page. A subscription agreement that gives the provider a broad, silent right to vary features and price on renewal is doing legal work that the customer-facing journey then has to live up to in practice, and regulators are now looking at whether it does.
That means aligning three things that are often owned by three different teams: what the contract’s variation clause actually permits, what the renewal notice actually says, and what the checkout or account settings screen actually shows the customer. A gap between any two of those is where a misleading omission finding gets made.
What happens if the CMA finds against a bundling practice
The CMA can now decide unfairness itself, and act on it directly, without going to court first.
Under the Digital Markets, Competition and Consumers Act 2024 the CMA gained direct enforcement powers over consumer protection law it did not previously have. It can determine for itself that a practice is unfair, order a business to change its pricing, disclosure or renewal practices, require compensation or refunds to affected customers, and impose penalties of up to 10 percent of a business’s global annual turnover, all without first needing a court to make the finding.
That is a materially faster and more direct route to enforcement than the pre-2024 position, and it is the backdrop against which this investigation, and any SaaS provider’s own bundling practice, now has to be assessed.
Questions this raises
Six questions the CMA’s Microsoft 365 and Copilot investigation tends to prompt, answered directly.
What is the CMA actually investigating at Microsoft?
The UK Competition and Markets Authority is investigating whether Microsoft 365 customers were given sufficiently clear information about their subscription options after changes that introduced Copilot functionality into existing plans. The concern is that customers may have been misled about their choices and paid more as a result. The investigation opened on 29 July 2026 and remains active.
Has Microsoft been fined or found to have broken the law?
No. As of September 2026 this is an active investigation, not a finding. No fine or penalty has been announced. The CMA is still examining evidence and the investigation is expected to continue through at least December 2026.
Does this only matter to Microsoft?
No. The commercial pattern under scrutiny, adding AI functionality to an existing subscription and changing the price or terms in the process, is common across SaaS. Any provider that has bundled an AI feature into a renewal, upgrade or default plan change faces the same underlying question about clarity of customer choice.
What does “misleading omission” mean in a subscription context?
Under UK consumer protection law, a misleading omission occurs where a trader leaves out or obscures material information a customer needs to make an informed transactional decision, even without an explicit false statement. In a SaaS renewal, that can mean a bundled price increase, a changed default option, or an unclear description of what the new plan actually includes.
What should a SaaS provider check in its own renewal and upgrade flow?
Whether the renewal notice states clearly what has changed and why the price has moved, whether a lower-cost or unchanged option remains genuinely visible and selectable, whether marketing language describes the AI feature accurately, and whether the checkout or renewal journey defaults the customer into the higher tier without an equally prominent alternative.
What happens if the CMA finds against a bundling practice like this?
Under the Digital Markets, Competition and Consumers Act 2024 the CMA can itself decide that a practice is unfair and impose penalties of up to 10 percent of global turnover, order changes to pricing and disclosure practices, and require refunds or compensation to affected customers, without needing to go to court first.
Sources
- UK Competition and Markets Authority, Microsoft 365 and Copilot subscription options investigation, published 29 July 2026, investigation ongoing as at September 2026.
- UK Digital Markets, Competition and Consumers Act 2024, direct consumer enforcement powers and penalty provisions.
- UK Competition and Markets Authority, general guidance on unfair commercial practices and misleading omissions under consumer protection law.
Adding AI to a subscription product?
Eliga provides embedded commercial and technology counsel to scaling businesses. If you are bundling an AI feature into an existing plan, changing a renewal flow, or writing the pricing and disclosure language that sits behind it, we should look at it before a regulator does.
This page is general information about UK commercial law, competition regulation and SaaS subscription practice. It is not legal advice and does not create a solicitor-client relationship. Take specific advice on anything you are about to negotiate, sign or roll out to customers.