As part of an investigation into the online console video gaming sector the Competition and Markets Authority (CMA) 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 realised they were still paying for services they no longer used. With this in mind, the CMA secured undertakings with Microsoft to address the concerns. Now, the improvements fall into four categories:
Better upfront information - Microsoft will now provide more transparent information to help customers understand their Xbox membership. The company is now bound to make clear 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 has to contact existing customers who haven’t been using their Game Pass membership for a long time but are still paying. The company is bound to remind customers how to stop payments and even stop altogether if the users continue not to use their memberships. Price Increase Information - Microsoft now has to give clearer indications of any future price rises. Not only that, but this ties back to point 1 where Microsoft will have to ensure people know how to turn off auto-renewal in case they don’t want to pay for a higher price for the service.
Michael Grenfell, Executive Director of Enforcement at the CMA, said the following: Speaking of other companies, the CMA has confirmed that it will look into the way Nintendo and Sony are handling their subscription services as well. The report filed by CMA on the matter expresses that the regulator is concerned about 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. Other companies offering memberships and subscriptions that auto-renew should take note, and review their practices to ensure they comply with consumer protection law. As such, it shouldn’t be a surprise if Nintendo’s or Sony’s policies see a radical change that will benefit consumers in general anytime soon.
