Italy’s competition authority, the Autorità Garante della Concorrenza e del Mercato (AGCM), launched a formal investigation on June 26, 2026, into Microsoft over allegations of unfair commercial practices linked to the integration of Copilot generative AI features into Microsoft 365 subscriptions. The probe centers on whether the tech giant violated Italian consumer protection laws by automatically adding Copilot—previously an optional add-on—to standard Personal and Family plans without explicit user consent, while simultaneously raising subscription prices. The move marks the first antitrust action in Europe directly targeting Microsoft’s aggressive AI bundling strategy, which has drawn growing ire from subscribers who felt blindsided by the changes.

The AGCM’s preliminary assessment suggests Microsoft may have skirted transparency requirements by failing to provide clear, advance notice about the automatic inclusion of Copilot in existing subscriptions. According to the watchdog, the company implemented the change as a pre-selected condition during renewal cycles, effectively pushing users into paying for AI tools they may not want or need. This practice, the authority argues, amounts to an “unfair commercial practice” under Italian law, which mandates explicit opt-in for any additional services that carry extra costs.

The Heart of the Probe: Automatic Copilot Activation and Price Hikes

At the core of the investigation is Microsoft’s decision to fold Copilot—a suite of AI-powered features including writing assistance in Word, data analysis in Excel, and presentation generation in PowerPoint—into the mainstream Microsoft 365 experience. Previously, Copilot was sold as a separate add-on priced at $20 per user per month for business accounts, or as a limited free preview for consumers. However, in early 2026, Microsoft began transitioning consumer subscribers to a new “Microsoft 365 with Copilot” plan, which replaced legacy tiers with a single bundle carrying a 30% price increase. For example, the Microsoft 365 Family plan jumped from $99.99 per year to $129.99, while the Personal plan climbed from $69.99 to $89.99.

The AGCM contends that many users were not adequately informed of this change. Although Microsoft posted updates on its blog and sent emails in the weeks leading up to the switch, the authority argues that the sheer volume of routine communications from the company, coupled with the technical nature of the alteration, likely meant that a substantial number of subscribers simply didn’t realize they were being upgraded and charged more. Worse, because Copilot was pre-activated and no “opt-out” mechanism was provided during renewal—users had to manually downgrade to a “Classic” plan that lacked AI features—the default path kept them on the costlier tier.

Microsoft’s Broader AI Monetization Push

The Italian probe highlights the growing pains of Microsoft’s audacious bet on generative AI. Since integrating OpenAI’s technology across its product line, the company has poured billions into AI infrastructure, and the push to monetize those investments is accelerating. Microsoft 365 Copilot is the flagship attempt to turn AI into a steady revenue stream, but the consumer rollout has been turbulent. Initially, the company offered Copilot as a limited free preview, then transitioned to a paid model in phases. The abrupt shift—from “optional add-on” to “included by default with a higher price”—has left many consumers feeling coerced.

Consumer advocacy groups in Italy had been pressuring the AGCM to act for months. Altroconsumo, the largest Italian consumer association, filed a formal complaint in May 2026, alleging that the bundling violated the principles of fair notice and freedom of choice. “Microsoft is forcing users to pay for AI tools they may never use,” the group stated in a release. “This is a textbook case of bundling abuse, where the dominant provider leverages its position to push ancillary services onto captive customers.” The AGCM’s investigation now formalizes those concerns, with potential fines of up to €10 million if Microsoft is found guilty.

What the Investigation Means for Italian (and European) Consumers

The probe comes at a sensitive time for Microsoft in Europe. The bloc has been tightening its regulatory grip on Big Tech under the Digital Markets Act (DMA) and Digital Services Act (DSA), and antitrust authorities in multiple member states have signaled heightened scrutiny of AI-related commercial practices. Italy’s move could snowball into a wider EU-level action, as other national watchdogs often coordinate investigations when a cross-border issue emerges. The AGCM is expected to share its findings with the European Commission’s Directorate-General for Competition, which may open its own probe or issue guidance on AI bundling.

For the roughly 20 million Microsoft 365 subscribers in Italy, the investigation offers a glimmer of hope for restitution or at least clearer consent rules in the future. Depending on the outcome, Microsoft could be forced to:
- Automatically reimburse users who were charged the higher price without explicit consent.
- Clearly separate AI features from the base productivity suite, allowing users to subscribe to core applications without Copilot at a lower price.
- Implement an unambiguous opt-in mechanism for any future AI add-ons.
- Issue public corrective notices and change its communication practices.

The probe also raises broader questions about the nature of AI integration: if generative features become as fundamental as spell-check, can a company justify charging extra for them? Microsoft argues that Copilot delivers substantial added value and incurs high compute costs, so the price increase is warranted. But consumer groups counter that the average user rarely uses the AI capabilities, turning the bundle into a de facto tax on a service that has seen only incremental feature improvements in recent years.

Microsoft’s Response and the Road Ahead

Microsoft has yet to issue a full public statement on the Italian probe, but a company spokesperson told reporters that the transition to the new Microsoft 365 plans was communicated transparently and that users were given the option to switch to a cheaper, non-AI plan. “We believe our practices comply with all applicable laws and we are cooperating fully with the Autorità,” the spokesperson said. However, critics note that the “Classic” plans were not prominently advertised and required navigating through several support pages to find, effectively discouraging downgrades.

The AGCM’s investigation is expected to last several months, with a final ruling likely in early 2027. During this period, the authority can order interim measures if it deems that the practices are causing irreparable harm to consumers. It could, for instance, compel Microsoft to halt the automatic renewal at the higher rate while the investigation is ongoing.

Beyond Italy, the case could set a precedent for how AI products are marketed and sold globally. Regulators in other jurisdictions, including the U.S. Federal Trade Commission and the UK’s Competition and Markets Authority, are reportedly monitoring the situation. Any adverse finding against Microsoft could force the company to untangle its AI integrations in markets around the world, potentially slowing its race to monetize Copilot.

The Bigger Picture: AI Bundling and Antitrust Scrutiny

The Italian probe is part of a larger wave of antitrust actions targeting tech companies’ AI strategies. In 2025, the U.S. Department of Justice sued Google over claims it abused its search monopoly to train its AI models. The European Commission has been investigating AI chip bundling by Nvidia, and France’s Competition Authority recently fined a major cloud provider for tying AI services to infrastructure contracts. Microsoft itself is already under EU investigation for bundling Teams with Office 365—a case that could now be expanded to include Copilot.

Consumer protection experts argue that opaque AI bundling poses a unique risk because the technology’s value is still poorly understood by the average user. “When a company like Microsoft adds an AI feature and raises the price, customers can’t easily gauge whether the new capability is worth the extra cost,” said Dr. Elena Rossi, a professor of digital law at the University of Bologna. “The asymmetric information problem is severe, and it’s exactly the kind of situation antitrust law was designed to address.”

What Subscribers Can Do Now

While the investigation unfolds, Italian Microsoft 365 users who feel they were unfairly charged can take several steps. First, check the subscription management portal to see which plan you’re on. If you’re on the new “Microsoft 365 with Copilot” plan and don’t want the AI features, you can switch to the “Classic” plan, though this requires canceling the current subscription and re-subscribing—a loss of any grandfathered pricing or benefits. Second, file a complaint with AGCM through its online portal to add weight to the collective grievance. Third, contact Microsoft support to request a refund for the price difference; while there’s no guarantee of success, a track record of complaints could strengthen the regulator’s case.

For those outside Italy, the investigation is a wake-up call to scrutinize upcoming subscription renewals. Regulatory pressure often leads companies to offer clearer opt-out paths, so staying informed can save money.

Conclusion: A Defining Moment for AI Consumer Rights

The AGCM’s investigation into Microsoft 365 Copilot bundling is more than a local regulatory spat. It tests the boundaries of how far a dominant platform can go in using its existing install base to push new, expensive AI features. If Italy rules against Microsoft, the decision could ripple across the tech industry, forcing a rethink of the “AI by default” approach that is becoming increasingly common. For consumers, the message is clear: in an era where software is constantly evolving, the right to informed consent and a genuine choice remains paramount. The months ahead will reveal whether Microsoft can defend its strategy—or whether it will be forced to unbundle the future.