Italy’s competition watchdog has opened an investigation into Microsoft over concerns it may not have clearly informed consumers about the integration of Copilot and Designer into Microsoft 365 subscriptions, associated price increases, and automatic upgrades to higher-cost plans.
The Italian Competition Authority (AGCM), in a statement to the press, said it had opened an investigation into Microsoft S.r.l., the vendor’s Italian subsidiary, and Microsoft Ireland Operations Ltd. to assess whether the way the changes to M365 pricing were communicated may have unduly restricted consumers’ freedom of choice.
Although the AGCM’s announcement does not explicitly identify the pricing event under investigation, its description aligns with Microsoft’s January 2025 rollout of Copilot and Designer for Microsoft 365 Personal and Family subscribers.
At the time, Microsoft announced its first price increase for the consumer subscriptions since the launch of Copilot and Designer, stating that existing subscribers would pay the higher price at their next renewal after the AI features were added.
Could scrutiny spread beyond Italy?
The Italian probe is not the first time Microsoft’s communication around AI-related Microsoft 365 pricing has drawn regulatory attention.
The investigation follows earlier scrutiny of Microsoft’s consumer pricing communications in Australia and New Zealand, where Microsoft apologized and revised some of its messaging after regulators raised concerns over how AI-enabled Microsoft 365 subscriptions were presented to customers.
That episode could prove relevant for the current investigation, even though the legal frameworks differ, said Pareekh Jain, principal analyst at Pareekh Consulting.
“Microsoft’s apology and revised communications show similar concerns were raised before,” the analyst said.
“While the legal cases differ, Italian regulators may see it as evidence that clearer customer communication was already known to be necessary,” he added.
Jain also expects regulators elsewhere to watch the outcome of the Italian investigation: “Regulators in the EU, UK, Australia, New Zealand, and Canada are likely to watch closely, especially where AI is bundled into existing subscriptions with higher prices or automatic renewals.”
Enterprise buyers are likely to scrutinize AI pricing more closely
Whether the Italian investigation ultimately results in penalties against Microsoft remains to be seen, but analysts say the probe could have an impact on M365 commercial plans, which are separate and set to take effect on July 1.
The investigation serves as a reminder for enterprises to examine AI-related price changes even if Microsoft’s commercial licensing process seems more transparent than its consumer subscription model, Jain said. “CIOs should still verify what is changing at renewal and whether AI features are optional.”
Enterprise procurement teams should ask tougher questions during negotiations, said Bhupendra Chopra, chief revenue officer at IT consulting firm Kanerika.
“Procurement teams should ask questions, such as what AI am I paying for, can I see it itemized, and can I decline it without losing the rest? Buyers would be right to want AI pricing written into renewal terms with clear opt-outs and price protection,” Chopra said.
These questions, according to Jain, could provide additional leverage during licensing discussions to negotiate flexible terms.
However, Chopra pointed out that the investigation is symptomatic of a broader tension between software vendors’ efforts to integrate AI into existing products and regulators’ expectations around transparency and customer choice.
“Building AI into existing products and pricing it in is becoming standard across software, not unique to one vendor. Regulators are testing an old question against a new feature — whether buyers were given clear information and a real choice,” the analyst said.
For enterprises, the analyst added, the practical takeaway is straightforward: “Expect AI to show up inside the tools you already own, expect it to carry a cost, and review what each renewal actually includes. Treated as routine cost discipline, it stops being a surprise.”
Microsoft did not respond to a request for comment. Computerworld has also reached out to the Italian Competition Authority for additional details about the scope of the investigation.
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