The UK’s Science, Innovation, and Technology Committee is pressing Microsoft for answers about the recent Microsoft 365 price hikes and why customers are forced to opt out of the more expensive Copilot version.
In a letter [PDF] to Hugh Milward, Microsoft’s VP of external affairs, dated March 17, committee chair MP Chi Onwurah expressed her “dismay” that the price increases have hit everyday consumers but not large organizations such as the UK government.
Onwurah reminded Milward that the government itself secured a 6 percent reduction in its Microsoft 365 license price in February, shortly after talk of a consumer-focused price hike began, also noting “the wider context of notable price reductions across many technology product categories.”
Microsoft confirmed at the start of the year that the cost of Personal and Family 365 licenses would rise by 42 percent and 31 percent respectively. It wasn’t confirmed at the time, but the increase was largely suspected to be due to the addition of Copilot.
“The apparent bundling of Copilot – which, according to reports, is a lossmaking product for your company – with a long-established offering such as 365 also raises cross-subsidy and competition concerns,” Onwurah wrote.
In addition to questions surrounding the cost to consumers, Onwurah requested answers regarding Microsoft’s assessment of the potential regulatory implications of bundling Copilot with 365.
Microsoft has a history of bundling products, and this is causing it some trouble in Europe after Slack complained that rolling Teams into Office 365 was anti-competitive.
Onwurah also raised the matter of users having to opt out of Copilot being bundled into their 365 package instead of an opt-in model.
Copilot’s various issues have been well reported and, coupled with many consumers’ general distrust of the technology, it all culminates in a situation that doesn’t appear to put the customer in full control of their 365 plan.
Onwurah notes in the letter that Microsoft had latterly confirmed customers can revert to an AI-less Classic subscription, which retains the pre-hike price, but says this wasn’t clearly communicated by the company, nor was the length of time for which these Classic plans would be available.
Microsoft’s decision to bypass consent for features like Copilot has ruffled the feathers, including those of our vultures.
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- Microsoft adds another Copilot hotkey – this time for AI voice chat
- Microsoft goes native with Copilot. Again
However, Milward’s response to the letter on March 19 ignored key questions Onwurah raised, including those regarding consent for AI features.
He explained that Microsoft hadn’t increased the prices of either the Personal or Family plans since 2013 despite adding various new features in the 12 years since.
Milward also blamed inflation and the rising cost of business for the increases, before confirming: “Another factor is the addition of some Copilot AI features into applications such as Word, Excel and PowerPoint. These features amplify the user’s experience of the service in a way that we believe consumers are coming to expect, as the world moves to adopt and embrace AI technology in all areas.”
Of the communications surrounding the price hikes, the VP said Microsoft sent either two or three emails to each customer, depending on whether they are monthly or annual subscribers, informing them of the changes to their specific plan. These didn’t include details about possible alternatives but did include information about how to cancel their subscription.
Milward made no promises about the length of time for which Microsoft will offer Classic subscriptions, while also failing to address questions about customers’ consent to the changes and competition assessments.
He said: “I hope this information resolves the questions you raised. If you or the Committee would like to discuss this further, I will of course make myself available to do so.”
The Register asked Microsoft to comment on its opt-out versus opt-in approach to Copilot with Microsoft 365 but it had not responded by the time of publication. ®
