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Microsoft is cooperating with the CMA.
The U.K.’s Competition and Markets Authority (CMA)—which is also probing the troubled Nvidia/Arm merger—has identified Microsoft’s subscription renewal practices as a concern following its investigation into the “online console gaming sector.”
The CMA took issue with Microsoft’s approach to subscription renewal on several levels. Whether it is clear upfront that contracts automatically renew leads the list of concerns. The regulatory body also found an issue in the level of difficulty in turning off automatic renewal. Finally, the CMA drew attention to whether people knew they were still paying for Microsoft services after discontinuing use. Microsoft has committed to working with the CMA to address and remedy the concerns surrounding the company’s subscription practices.
“Gamers need to be given clear and timely information to make informed choices when signing up for auto-renewing memberships and subscriptions,” said Michael Grenfell, executive director of enforcement at the CMA. “We are therefore pleased that Microsoft has given the CMA these formal undertakings to improve the fairness of their practices and protect consumers, and will be offering refunds to certain customers.”
Microsoft will provide “better upfront information,” according to the CMA. The goal here is to arm customers with a better depth of knowledge regarding their Xbox memberships. These include transparency about subscription expiration and refunds upon accidental renewals. Along with this, Microsoft must contact 12-month contract holders to present the option of ending their contracts and be granted a proportional refund.
Aside from active memberships, Microsoft will contact existing customers with inactive accounts that are still shelling out for the subscription. The CMA said that Microsoft should stop taking payments from inactive accounts if their attempts to get in touch fail to return to regular use. No specific window of time is set in the CMA’s report.
Rounding out the list of undertakings, Microsoft will provide clearer price hike notifications and is tasked with ensuring those who use its subscriptions understand how to toggle auto-renewal following price raises.
All of these practices sound fairly standard and seem as though they should have been the norm all along. While these undertakings create some extra work for Microsoft’s Xbox teams, it shouldn’t be anything more than a regular afternoon of troubleshooting for the gaming giant. But it doesn’t look like the CMA is halting its transparency efforts with Microsoft.
“Other companies offering memberships and subscriptions that auto-renew should take note, and review their practices to ensure they comply with consumer protection law,” Grenfell said.
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