The improvements were agreed upon as part of an investigation by the Competition and Markets Authority (CMA) to determine whether online gaming contracts offered by Microsoft, Sony and Nintendo are breaching consumer protection laws.
Launched in April 2019, the investigation is focused on several key issues including whether contract terms are unfair, how easy it is to cancel or obtain a refund, and how fair the auto-renewal process is.
On Wednesday, the CMA said it has received the following undertakings from Microsoft to improve its Xbox Live Gold and Xbox Game Pass auto-renewal practices.
- 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 said undertakings like those agreed to by Microsoft are voluntary agreements companies make to address an enforcement authority’s concerns and resolve an investigation without the need for court action.
“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.
“Other companies offering memberships and subscriptions that auto-renew should take note, and review their practices to ensure they comply with consumer protection law.”