Microsoft to Make Amends to Xbox Subscription Norms Following Regulatory Concerns

Updated on February 7th, 2022

Microsoft is going to make changes to its Xbox subscription practices after a UK market regulations watchdog raised concerns. The UK’s Competition and Markets Authority (CMA) voiced disapproval regarding the automatic renewal of contracts for online gaming services from Xbox.

The authority identified concerns about certain features of Microsoft’s auto-renewing subscriptions, in particular: whether it was clear upfront that contracts would automatically renew; how easy it was to turn off automatic renewal; and whether people may not have realized they were still paying for services they no longer used.

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Michael Grenfell, Executive Director of Enforcement at the CMA, said, "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." He added that "other companies offering memberships and subscriptions that auto-renew should take note, and review their practices to ensure they comply with consumer protection law."

CMA "has secured undertakings" with the Xbox creator to address these concerns. The undertakings apply to contracts between Microsoft and consumers for the supply of Xbox Live Gold, Game Pass, and Game Pass Ultimate.

The tech giant came up with the following improvements to solve these issues.

• 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.

CMA had launched a consumer law investigation into the auto-renewal practices of Nintendo Switch, PlayStation, and Xbox in 2019. The concerns of CMA, according to its website are "whether some of these companies’ business practices are legal, such as their use of auto-renewals for online gaming contracts, their cancellation, and refund policies and their terms and conditions." Microsoft is the first to agree to make amends to its subscription practices.

The authority is also inviting gamers with bitter experiences caused by subscription practices of these gaming firms to share their thoughts via mail.

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