This move from the Silicon Valley giant comes following UK’s Competition and Markets Authority (CMA) investigation into the online console video gaming sector it had started on April 5, 2019, and concluded on January 26, 2022. During its investigation, it identified concerns about certain features of Microsoft’s auto-renewing subscriptions. Those concerns included the use of auto-renewals for online gaming contracts, their cancellation, and refund policies, and their terms and conditions. The investigation carried out by CMA examined several issues including:
are the contract terms unfair? – do the companies’ terms give them wide discretion to change the quality of the deal, for example, by reducing the number of games included or increasing the price? how easy it is to cancel or obtain a refund? – are there any factors that make it difficult for people to cancel their contract or get their money back? how fair is the auto-renewal process? – are customers clearly told that their membership will be rolled over, are they regularly reminded that they are on a roll-over contract before further payments are taken, and is auto-renewal set as the default option?
To address these concerns, the CMA has secured undertakings with Microsoft to make a series of improvements to their auto-renewing subscriptions for online gaming services. The improvements include: Better upfront information: Microsoft will provide more transparent, upfront information to help customers understand their Xbox membership – making clear, for example, that the subscription will auto-renew unless the customer turns off auto-renewal; when the subscription will auto-renew; how much it will cost; and how the customer can receive a refund after an accidental renewal Refunds: Microsoft will contact existing customers on recurring 12-month contracts and give them the option to end their contract and claim a pro-rata refund Inactive memberships: Microsoft will also contact existing customers who haven’t used their memberships for a long time but are still paying. These customers will be reminded how to stop payments, and if they continue not to use their memberships, Microsoft will ultimately stop taking further payments Better information about price increases: Microsoft will give clearer notifications of any future price rises, and will ensure people know how to turn off auto-renewal if they don’t want to pay the higher price “Gamers need to be given clear and timely information to make informed choices when signing up for auto-renewing memberships and subscriptions. 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,” said Michael Greenfell, the CMA’s Executive Director Of Enforcement. “Other companies offering memberships and subscriptions that auto-renew should take note, and review their practices to ensure they comply with consumer protection law.” Since the CMA is a UK regulator, the subscription policy changes will first roll out in the UK and eventually internationally. “Changes to inactive subscriptions will initially roll out in the UK and will be available globally soon,” a Microsoft spokesperson said. Besides Microsoft’s Xbox, the CMA investigation carried out in April 2019 also included Nintendo Switch and Sony PlayStation. As the CMA continues its investigation, we could see similar changes made by Sony and Nintendo in the near future.
