Italy probes Microsoft over Microsoft 365 AI subscription price hike

Italy's antitrust authority has opened an investigation into Microsoft over allegations that the company used unfair commercial practices when increasing the price of its Microsoft 365 subscription after adding AI features.

The regulator said Microsoft did not adequately inform consumers that its Microsoft 365 productivity suite had been integrated with AI-powered tools, including Copilot and Designer, before moving subscribers to a higher-priced plan, Reuters reported.

According to the watchdog, consumers were automatically migrated to the more expensive subscription unless they actively opted out, while receiving insufficient information to make an informed decision about renewing their contracts.

The authority said the company's practices may have unduly restricted consumers' freedom of choice, raising concerns that the subscription changes could constitute an aggressive commercial practice under Italian consumer protection rules.

The investigation will examine whether Microsoft provided adequate disclosure about the inclusion of AI features and the resulting price increase before customers were renewed into the updated subscription plan.

The case adds to growing regulatory scrutiny of how technology companies are commercializing generative AI by integrating new AI capabilities into existing software subscriptions and adjusting pricing accordingly.

If the Italian authority finds that Microsoft violated consumer protection laws, the company could face regulatory penalties and be required to change how it communicates future subscription updates and AI-related pricing changes to customers.