Italy’s competition authority, the Autorità Garante della Concorrenza e del Mercato (AGCM), opened a formal investigation on June 26, 2026, into Microsoft’s Irish and Italian subsidiaries over the company’s recent price increases for Microsoft 365, which the regulator suspects may have been imposed without adequate consumer disclosure — specifically about mandatory AI-powered features like Copilot and Designer.
The probe centers on allegations that Microsoft failed to clearly explain to existing subscribers why their bills were rising, in many cases automatically switching them to pricier plans that included generative AI tools they did not ask for. According to the AGCM’s initial filing, the investigation will examine whether Microsoft violated Italy’s Consumer Code by using aggressive or misleading commercial practices.
At stake is a core consumer-rights principle: when a company raises prices and alters the functionality of a service millions rely on daily, it must provide transparent, timely, and comprehensible notice. The Italian authority believes Microsoft may have fallen short, pushing users into higher-cost tiers while burying the true reasons — the integration of Copilot and Designer — in obscure update emails or toggling AI features on by default with price adjustments.
The investigation focuses on Microsoft 365’s Personal and Family plans, as well as business subscriptions offered directly to small enterprises. Starting in early 2026, Microsoft rolled out what it called “AI-enhanced productivity” across Word, Excel, PowerPoint, and Outlook, bundling Copilot’s generative writing, data analysis, and presentation creation, along with Designer’s image-generation capabilities. The base price for a Microsoft 365 Personal subscription jumped from €69 to €89 per year, while Family plans rose from €99 to €129. Business Basic and Business Standard tiers saw similar percentage increases, with Microsoft labeling the changes as necessary to deliver “the future of work.”
But the AGCM alleges the company did not clearly separate the AI components from the core productivity suite. In many cases, users were not given a simple opt-out: they could either accept the higher-priced, AI-laden plan or downgrade to a lower tier that lacked features they had previously paid for. The regulator’s preliminary review found that communication materials sent to Italian consumers “focused on the benefits of AI without specifying that the price increase was substantially tied to new functions users may not want or need.”
Moreover, the watchdog is scrutinizing the auto-renewal process. Many subscribers were enrolled in annual renewals and received notice of the price change only 30 days before their subscription rolled over — a window some consumer advocates argue is too short for a service that had been stable in price for years. The AGCM wants to determine whether Microsoft deliberately made it cumbersome to cancel or switch plans without penalty.
“When a dominant player with such pervasive reach alters the commercial terms of a widely used service, the bar for transparency must be high,” said AGCM President Roberto Rustichelli in a statement accompanying the probe announcement. “We will assess whether consumers were placed in a position to make a fully informed choice.”
Microsoft responded swiftly, vowing to cooperate. “We believe our pricing adjustments reflect the substantial value Copilot and Designer bring to our customers,” a company spokesperson said. “We communicated the changes through multiple channels and offered clear options. We have always complied with Italian and European consumer laws and look forward to clarifying this with the AGCM.”
Yet the probe arrives amid a broader European regulatory crackdown on how tech giants roll out AI features. The European Commission’s Digital Markets Act (DMA) already designates Microsoft as a gatekeeper for Windows and LinkedIn, and the EU is considering whether Microsoft 365 should also be included. Any finding of unfair commercial practices in Italy could embolden similar investigations in other member states — or even trigger a coordinated action under the Consumer Protection Cooperation (CPC) network.
The AGCM’s move also highlights a tension that has simmered since Microsoft first announced its “AI-first” strategy in 2023. Early adopters of Copilot Pro, a separate add-on, paid an extra €22 per month. When Microsoft began integrating a limited version of Copilot directly into the base 365 subscription, it effectively forced all users to pay for AI, even those who never used it. Consumer surveys in Italy indicate that while awareness of AI tools is growing, a substantial portion of Microsoft 365 users — particularly older demographics and small business owners — either do not understand the features or actively avoid them, citing privacy concerns or simple lack of need.
“I use Word to write a few letters and Excel for basic bookkeeping,” said Marco Spinelli, a retired accountant in Bologna. “Suddenly I’m paying 30% more for something called ‘Copilot’ I didn’t request. When I called support, they said I could switch to a cheaper plan, but then I’d lose Outlook and 1 TB of OneDrive storage. It felt like blackmail.”
Spinelli’s frustration echoes a wave of complaints on Italian tech forums and consumer association hotlines. Altroconsumo, Italy’s largest consumer organization, reported receiving hundreds of grievances in the first quarter of 2026 alone. Many users recounted that the price-increase notification landed in their spam folders or was styled as a routine “what’s new” update rather than a clear billing notice. Some claimed the email subject line read “Exciting new AI features in Microsoft 365,” with no mention of the cost until the third paragraph.
These anecdotes align with the AGCM’s hypothesis that Microsoft may have employed so-called “dark patterns” — interface designs meant to nudge users toward certain decisions by making alternatives hard to find or compare. The investigation will dig into the entire user journey: from the initial notification, to the options presented, to the cancellation flow. Under Italy’s Consumer Code, such practices can incur fines of up to €10 million, or, if the company’s annual turnover is higher, a percentage of global revenue.
The inclusion of Designer — Microsoft’s AI image generator built on OpenAI’s DALL-E models — in the bundled suite remains particularly contentious. While Copilot’s text-based assistance can be argued as a productivity enhancer, Designer’s creative AI is seen by many as a tertiary feature, not a core office tool. Requiring consumers to pay extra for it, critics say, resembles the ill-fated era of cable TV bundling, where customers were forced to buy channels they would never watch.
Microsoft’s defense will likely lean on its claim that the price adjustment was not solely for AI. The company poured billions into data center expansions, security enhancements, and the vast infrastructure needed to run AI models locally and in the cloud. In a March 2026 blog post, it noted that the last Microsoft 365 price increase was in 2013, and that “the cumulative value added since then — from real-time collaboration to enterprise-grade security — far exceeds the nominal price change.” Nonetheless, the AGCM seems unconvinced that the messaging accurately reflected the AI-centric nature of the latest hike.
The probe’s outcome could extend beyond Italy. If the AGCM determines that Microsoft’s practices constitute an unfair commercial behavior, it could order the company to offer refunds, allow plan downgrades without penalty, and restructure its subscription tiers with a clear AI-free option at the old price. Such remedies would likely be applied across the EU to avoid fragmentation, especially given the bloc’s growing coordination on digital enforcement.
Other regulators are already watching. France’s DGCCRF and Germany’s Bundeskartellamt have both signaled interest in the AI bundling issue, though neither has opened a formal case yet. Spain’s consumer affairs ministry recently released a white paper cautioning against “forced AI subscriptions,” specifically naming Microsoft 365 and Google Workspace as potential examples. The Italian investigation thus serves as a bellwether for a regulatory debate that will define how AI is monetized in consumer software.
For Microsoft, the timing is delicate. The company has been aggressively positioning Copilot as the cornerstone of its future, integrating it into Windows, Edge, and GitHub. Enterprise contracts increasingly include AI credits, and the strategy appears to be paying off: Microsoft’s Q1 2026 earnings showed a 22% jump in productivity and business process revenue, driven in part by AI attach rates. Disentangling that progress from a consumer backlash — and now an antitrust probe — could force a recalibration of how AI features are packaged and sold to individuals.
Some market analysts believe the AGCM investigation, while procedurally limited to Italy, could pressure Microsoft to introduce a global “classic” 365 plan, stripping out Copilot and Designer and keeping the old price point. Such a move would mirror what Adobe did after pushback on mandatory AI features in Creative Cloud. Already, a “Microsoft 365 Classic” petition on change.org has gathered over 50,000 signatures across the EU.
But the complexities run deep. AI features are not simply bolt-on modules; they are woven into the fabric of the software. Removing Copilot from Word, for instance, would require a different build of the application. Maintaining separate codebases could impose costs Microsoft is reluctant to bear, especially when its long-term bet is that users will find the AI invaluable once they try it.
The investigation is expected to take at least 12 months, during which the AGCM can impose interim measures if it deems consumer harm to be imminent. Such measures could include ordering Microsoft to pause the price increase for Italian users or to send a corrective communication clearly explaining the changes.
For now, Italian subscribers can only wait — or vote with their wallets. Some have already migrated to open-source alternatives like LibreOffice or simpler cloud-based suites. But for millions of Windows users deeply embedded in the Microsoft ecosystem, untangling is not trivial. The case thus pulls into focus a fundamental question of the AI era: when a product you own becomes a service that keeps evolving, who decides what you pay for?
As the AGCM’s officials sift through documentation, the tech world will be watching closely. The line between innovation and imposition is razor-thin, and Italy’s probe may well draw it for a continent.