CMA Microsoft investigation: subscription enforcement before the DMCCA regime commences
In short: In the CMA Microsoft investigation, opened on 27 July 2026, the CMA is examining whether Microsoft 365 Personal and Family subscribers received clear information before plans that added Copilot renewed at higher prices. The CMA is applying consumer protection law already in force; the government anticipates that the DMCCA subscription contracts regime will commence in spring 2027. No finding has been made.
A subscription business preparing for the new statutory regime now has a live answer to whether subscription marketing can wait until spring 2027: in the CMA Microsoft investigation, opened on 27 July 2026, the Competition and Markets Authority (CMA) is examining how Microsoft presented information to Microsoft 365 Personal and Family subscribers when Copilot was added and prices rose. The CMA is applying consumer protection law already in force, and no finding has been made. The period between now and commencement is where the enforcement risk sits.
What the CMA Microsoft investigation covers
The CMA opened its consumer protection enforcement case against Microsoft Ireland Operations Limited, trading as Microsoft, on 27 July 2026 and announced it on 29 July 2026. The regulator is examining whether customers were given clear information upfront about their options when Microsoft changed its Microsoft 365 Personal and Family plans and whether pre-renewal communications were misleading.
According to the CMA, Microsoft gave existing subscribers access to new features, including Copilot, from January 2025 at no extra cost for the remainder of their subscription period. When the subscription ended, customers rolled onto a new plan with the additional features at a higher price unless they picked another plan or cancelled; a time-limited Classic plan kept the previous features at the previous price. The CMA’s figures put the Microsoft 365 price increase for annual subscribers at £25 a year: the new Personal plan costs £84.99 a year against £59.99 for its Classic version. Microsoft announced the changes on 16 January 2025, stating that existing subscribers would not see the price increase until their next renewal and could switch to plans without Copilot, including the time-limited Classic plans.
The CMA states that at this initial stage it should not be assumed that Microsoft has infringed consumer protection law, and that no finding has been made. A Microsoft spokesperson told The Register on 29 July 2026: “Consumer trust and transparency are priorities for Microsoft, and we are reviewing the CMA’s claims in detail. We remain committed to working constructively with the regulator as their inquiry progresses.” The initial evidence-gathering phase runs to the end of 2026. Microsoft faces parallel action elsewhere: the Australian Competition and Consumer Commission commenced Federal Court proceedings on 27 October 2025, alleging that Microsoft misled approximately 2.7 million Australian subscribers over the same Copilot changes, and the Italian Competition Authority opened an investigation on 26 June 2026 into the information given to Microsoft 365 subscribers, including whether the conduct amounted to an aggressive practice. The CMA’s separate strategic market status inquiry into Microsoft’s business software, covered in our Microsoft SMS investigation analysis, engages a different part of the same Act.
The subscription contracts regime is not in force
Chapter 2 of Part 4 of the Digital Markets, Competition and Consumers Act 2024 (DMCCA), sections 253 to 281, creates the first dedicated UK statutory regime for consumer subscription contracts. None of it is in force. Three commencement instruments have been made under the Act and none commences Chapter 2: SI 2024/1226 (digital markets and competition, 1 January 2025), SI 2025/272 (Part 3 enforcement and Part 4 Chapter 1 unfair trading, 6 April 2025) and SI 2026/284 (alternative dispute resolution only, 6 April 2026).
The Department for Business and Trade confirmed the timetable in its response of 2 April 2026 to the November 2024 implementation consultation: “We will legislate when parliamentary time allows and we anticipate that the regime will commence in spring 2027.” Commencement in spring 2027 does not suspend the law already in force. The CMA’s press release describes the investigation as separate from the government’s consultation on subscription contracts, drawing on existing and established legislation relating to unfair commercial practices.
Which law applies now
Two sets of rules cover the conduct the CMA describes, split by date. For acts and omissions from 6 April 2025, Chapter 1 of Part 4 of the DMCCA prohibits unfair commercial practices: a misleading action under section 226 covers false or deceptive information that leads the average consumer to a different transactional decision, and a misleading omission under section 227 covers leaving out material information the consumer needs to decide. For earlier conduct, including the January 2025 plan changes, the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277) continue to have effect under the transitional provision in section 252. The consumer redress provisions at sections 232, 234 and 235 remain uncommenced.
Enforcement changed on the same date: since 6 April 2025 the CMA has held direct consumer enforcement powers under Part 3 Chapter 4 of the DMCCA: it can investigate under section 180, issue provisional and final infringement notices under sections 181 and 182, and impose a monetary penalty of up to £300,000 or, if higher, 10% of the respondent’s global turnover under section 182(6), without recourse to the courts. The CMA says it has secured more than £1.95 million in refunds and levied fines close to £6.2 million with those powers. The DMCCA repealed the court-based route that preceded those powers, Part 8 of the Enterprise Act 2002, from 6 April 2025, with savings for earlier conduct; under that regime the courts made enforcement orders and accepted undertakings, and there was no equivalent penalty for the infringement itself.
The CMA has not stated in terms which route this case takes. The reference to Part 8 of the Enterprise Act 2002 on the case page appears in the section describing how the CMA processes personal data, rather than in any statement of the enforcement basis. The conduct the CMA describes spans the 6 April 2025 commencement date, so both regimes are in principle engaged: conduct within the new regime is exposed to penalties under section 182(6), while conduct before 6 April 2025 falls under the saved court-based regime. Renewal communications sent today are squarely within the direct enforcement regime.
What the spring 2027 regime adds
When Chapter 2 commences, subscription traders will owe duties that current law states only as general prohibitions. Sections 256 and 257 will prescribe pre-contract information, sections 258 and 259 will require reminder notices before a trial converts or an auto-renewal takes effect, and section 260 will require arrangements for consumers to exercise the right to end the contract; the government’s response confirms these must make exit straightforward, including online exit where the consumer signed up online. Sections 264 to 266 will add two 14-day cooling-off periods: an initial period on entering the contract and a renewal cooling-off period, which under section 265 arises after a trial or discounted period ends or where a renewal commits the consumer beyond 12 months. The government’s response confirms proportionate refunds on renewal cooling-off cancellations and an exclusion for charitable cultural and heritage memberships. Secondary legislation and guidance will supply the detail before commencement.
| Issue | Position today | From spring 2027 (anticipated) |
|---|---|---|
| Pre-renewal price information | Misleading actions and misleading omissions tests, DMCCA ss 226 and 227 | Prescribed pre-contract information, DMCCA ss 256 and 257 |
| Renewal reminders | No general statutory reminder duty | Reminder notices before conversion and auto-renewal, ss 258 and 259 |
| Cancellation route | Fairness controls on contract terms, Consumer Rights Act 2015 Part 2 | Straightforward exit arrangements, including online exit, s 260 |
| Cooling-off rights | Initial 14 days for distance contracts, Consumer Contracts Regulations 2013 (CCRs 2013) reg 29 | Initial and renewal 14-day periods for consumer subscription contracts within the regime, ss 264 to 266 |
| Enforcement | CMA direct enforcement, Part 3, penalties under s 182(6) | Unchanged: Part 3 applies to the new duties |
What the CMA Microsoft investigation means for subscription businesses
The Chapter 1 prohibitions of DMCCA Part 4 apply to commercial practices directed at consumers in the United Kingdom, wherever the trader operates from, the same connection test that section 149 sets for enforcement, so the tests the CMA is applying to Microsoft apply equally to a telecoms operator or a software business selling on subscription. A trader can test its own position this quarter from live order flows, renewal emails and consumer terms: does the pre-renewal communication state the new price, the existence of a cheaper option and the steps needed to take it, with the same prominence as the dearer default; is a default move to a higher tier, and its cost, disclosed before the renewal payment is taken; and is cancelling as straightforward as subscribing, given that obstructive cancellation can amount to an aggressive practice under section 228. The CMA’s stated concerns and the Australian regulator’s pleaded case both centre on the visibility of a cheaper alternative, and the Italian regulator is already examining aggressive-practice allegations over the same product.
Where the review extends to the terms themselves, the fairness controls in Part 2 of the Consumer Rights Act 2015 and the CMA’s reissued guidance apply alongside the unfair commercial practices rules; the guidance is covered in our CMA37 unfair contract terms analysis, and the scope of a consumer-facing terms review is set out on our platform terms and policies page.
Viewpoint
The CMA Microsoft investigation concerns the same mechanics the spring 2027 regime will prescribe: renewal pricing, default plan migration and the visibility of a cheaper alternative. I read that as deliberate sequencing. The CMA built its first direct enforcement round on fake reviews within weeks of the powers commencing, and it is now building its subscription record under the misleading actions and misleading omissions prohibitions before the bespoke duties commence. In my experience, renewal and price-change communications are often owned by marketing teams and reviewed against brand guidelines rather than against section 227; that gap, not the absence of the subscription contracts regime, is where enforcement risk accumulates between now and spring 2027.
Frequently asked questions
Is the DMCCA subscription contracts regime in force?
No. Chapter 2 of Part 4 of the DMCCA (sections 253 to 281) has not been commenced by any of the three commencement instruments made under the Act. The Department for Business and Trade said on 2 April 2026 that it anticipates the regime will commence in spring 2027, with secondary legislation and guidance before commencement.
Has the CMA Microsoft investigation made any finding?
No. The CMA states that at this initial stage it should not be assumed that Microsoft has infringed consumer protection law and that no finding has been made. The case, opened on 27 July 2026, is in an initial investigation phase with the next case update expected by the end of 2026.
What penalties can the CMA impose for unfair commercial practices?
Under section 182(6) of the DMCCA, a final infringement notice can impose a monetary penalty of up to £300,000 or, if higher, 10% of the respondent’s global turnover. The CMA says it has secured more than £1.95 million in refunds and levied fines close to £6.2 million since the direct consumer enforcement powers commenced in April 2025.
What will change for subscription businesses in spring 2027?
The subscription contracts regime in Chapter 2 of Part 4 will require prescribed pre-contract information, reminder notices before a trial converts or an auto-renewal takes effect, straightforward exit arrangements including online exit, and two 14-day cooling-off periods, including a renewal cooling-off period after a trial or where a renewal commits the consumer beyond 12 months.
For advice on subscription terms, renewal communications or a CMA consumer enforcement matter, contact Rob Bratby at Bratby Law.
