Microsoft Avoids Questions Regarding Consent for Copilot 365
Microsoft 365 Price Increases: UK Committee Questions Microsoft
The UK’s Science, Innovation, and Technology Committee has raised concerns over Microsoft’s recent price hikes for Microsoft 365. They are demanding clarity on the increases and have pointed out that consumers are essentially pushed to opt-out of the more expensive Copilot version, which bundles new features into the service.
Concerns Raised by Committee Chair
In a letter sent on March 17 to Hugh Milward, who is Microsoft’s Vice President for External Affairs, MP Chi Onwurah, the committee chair, expressed her dissatisfaction with the fact that the price increases burden everyday users, while larger organizations, including the UK government, are seemingly exempt. She highlighted that shortly before consumers were informed of the hikes, the UK government successfully negotiated a 6% reduction in its own Microsoft 365 license costs. This discrepancy raises questions, especially given the overall reduction in prices for many technological products in the market.
Details of the Price Increases
Earlier this year, Microsoft announced that the prices for Personal and Family 365 licenses would rise by 42% and 31%, respectively. Although not officially stated at the time, many believe that these price hikes are linked to the new features added with Copilot, an AI tool aimed at enhancing user experience.
Issues Surrounding Copilot Bundling
Onwurah noted that the introduction of Copilot as part of the regular 365 package raises concerns regarding competition and potential cross-subsidization. She requested clarity on Microsoft’s views regarding possible regulatory issues that could arise from bundling Copilot with existing services. This concern stems from Microsoft’s previous experiences in Europe, specifically when Slack filed complaints about Microsoft Teams being included in Office 365, which they deemed anti-competitive.
Opt-Out versus Opt-In Model
One notable aspect of Microsoft’s approach is the requirement for users to opt-out of having Copilot integrated into their subscription plans, rather than opting-in. This opt-out model has raised eyebrows, especially as many consumers already harbor doubts about AI technologies. Onwurah expressed that this model does not empower customers and ultimately undermines their control over their subscriptions.
Communication Issues and Consumer Rights
Onwurah pointed out that Microsoft had eventually confirmed that users could revert to a "Classic" subscription, which retains previous pricing. However, she criticized the company’s lack of clear communication regarding this option and the duration for which Classic plans would remain available.
In Milward’s response letter on March 19, he sidestepped several of the committee’s pressing questions, especially those related to customer consent regarding AI features. He emphasized that Microsoft had not increased the prices for Personal or Family plans since 2013, despite adding numerous new features over the years.
Reasons for the Price Hikes
Milward mentioned factors like inflation and rising operational costs as contributing to the price increases. He also noted that the addition of Copilot features in applications such as Word, Excel, and PowerPoint was meant to enhance user experience. He stated that these features help meet consumer expectations as the world increasingly embraces AI technology.
Lack of Transparency in Communication
Milward claimed that Microsoft had contacted customers through two or three emails regarding the upcoming changes, depending on whether they subscribed monthly or annually. However, he admitted that these communications did not adequately inform users about potential alternatives to their plans and instead focused on how to cancel their subscriptions.
While Milward expressed a willingness to discuss concerns further, he did not provide specific information about the duration for which Classic subscriptions would be offered or respond to inquiries about customer consent and competition assessments.
As of now, Microsoft has not publicly commented on its opt-out approach in relation to Copilot integration with Microsoft 365. The ongoing concerns surrounding these price hikes and the bundling of features indicate a growing need for clarity and fairness in consumer technology services.
