Italy AGCM probes Microsoft 365 price hike after Copilot AI auto-added

Italy's competition authority (AGCM) has opened a case against Microsoft Ireland Operations Ltd. and Microsoft S.r.l. over alleged unfair commercial practices tied to unexpected price increases in Microsoft 365 subscriptions. The probe focuses on whether consumers were adequately informed that Copilot (AI writing assistant) and Designer (AI image creation) had been added to their plans, which then auto-renewed at a higher price—$3 per month more in the US, with similar increases in other markets. Microsoft points to non-AI 'Basic' and limited-time 'Classic' plans as alternatives, but these were not broadly available across EMEA, leaving many users without a clear path to opt out.

This case highlights a broader European regulatory tension: can tech companies bundle AI features into existing subscriptions without explicit consent? Microsoft says it will cooperate and is 'committed to complying with Italian consumer law,' but AGCM argues that default enrollment in higher-priced AI tiers without transparent renewal notices violates consumer choice. If AGCM rules against Microsoft, it could force clearer renewal notifications, opt-in mechanisms for AI add-ons, and standardized non-AI pricing options across Europe. The outcome may set a precedent for how SaaS vendors handle AI upgrades globally, especially as similar probes could follow in other EU states.