After intervention by the UK’s Competition and Markets Authority (CMA), Microsoft will adjust its Xbox subscription model. The changes will eventually become global.
Microsoft will now cancel automatic subscription renewals for inactive account holders. This will be after sending reminders to stop the recurring payments, but there is no action. The company will also offer refunds to subscribers caught in this loop.
The CMA specifically mentioned Xbox Live Gold and Game Pass in its press release, where it pointed out that subscribers are automatically “rolled over at the end of each contract period and the customer charged unless they actively take steps to stop the subscription.”
The regulatory agency considered whether the automatic subscription renewal was easy to turn off and whether the subscribers are aware when they are paying for services they are no longer using. It also looked at whether the company has unfairly given itself room in the agreement to change the quality of the service by, for instance, reducing the number of games or increasing the price.
The investigation started in 2019 and covered the Nintendo Switch, Sony PlayStation, and Microsoft Xbox.
Microsoft has committed to making several improvements in its subscription services, including:
- 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
The CMA is not limiting this set of improvements to Microsoft, according to Michael Grenfell, director of enforcement. “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.
“Other companies offering memberships and subscriptions that auto-renew should take note, and review their practices to ensure they comply with consumer protection law.”
Microsoft has also pledged to bring the changes to the rest of the world, meaning non-UK-based gamers will also get notifications about auto-renewals and not pay for services they don’t use.
The company relies heavily on subscriptions to push its gaming offerings. For example, Microsoft recently announced it would acquire Activision Blizzard for $68.7 billion, a move that will bolster its Xbox Game Pass service. The service requires gamers to pay a monthly subscription for access to titles. Game Pass has 25 million members, according to the latest figures released by Microsoft. Microsoft aims to become the third-largest gaming company behind Sony and Tencent by adding massive games from Activision Blizzard.