Italy Probes Microsoft 365 Price Hike and AI Integration
1h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
microsoftantitrust
Fazen Markets Editorial Desk
Collective editorial team · methodology
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Italy’s antitrust authority, the Autorità Garante della Concorrenza e del Mercato (AGCM), has opened an investigation into Microsoft Corporation regarding its integration of artificial intelligence features into Microsoft 365 and a concurrent price increase. The probe, announced on June 26, 2026, will examine whether the tech giant’s bundling practices constitute an abuse of a dominant market position. Microsoft shares traded at $352.83 as of 08:30 UTC today, down 5.65% from the previous session’s close amid the regulatory scrutiny.
European regulators have a long history of aggressive antitrust enforcement against U.S. technology conglomerates. In 2023, the European Commission fined Google €4.125 billion for leveraging its Android mobile operating system dominance to favor its own search engine. Microsoft itself faced a landmark EU antitrust case in the 2000s, resulting in a €497 million fine for bundling Windows Media Player with its operating system. The current investigation reflects a renewed regulatory focus on how dominant firms integrate nascent technologies like generative AI into core product suites.
The macro backdrop for tech regulation is tightening, with the EU’s Digital Markets Act (DMA) fully enforced since March 2024. The DMA designates large tech platforms as “gatekeepers” and imposes strict rules on self-preferencing and bundling. Italy’s probe is one of the first to test these new regulatory powers against AI-driven product changes. The trigger is a specific consumer complaint alleging that Microsoft’s strategy forces an effective price increase on users who may not want or need the new Copilot AI functionalities.
Microsoft’s share price decline of 5.65% represents a significant single-day move for a mega-cap stock, erasing approximately $150 billion in market capitalization. The stock’s intraday range was wide, between $349.20 and $364.23, indicating high volatility and investor uncertainty following the probe’s announcement. This drop sharply underperforms the broader technology sector; the Nasdaq 100 index (NDX) was down only 1.2% over the same period.
The specific pricing action under scrutiny is a 30% increase for Microsoft 365 commercial subscriptions, which coincided with the inclusion of AI capabilities. For example, the Microsoft 365 Business Standard plan rose from $12.50 to $16.25 per user per month. Microsoft’s commercial cloud revenue exceeded $146 billion in its last fiscal year, making it one of the largest software-as-a-service businesses globally. The company holds an estimated 64% market share in the enterprise productivity software sector within the European Economic Area.
The immediate market impact is a re-rating of regulatory risk premiums for large-cap software stocks with significant European revenue exposure. Alphabet Inc. (GOOGL) and Salesforce Inc. (CRM) both traded lower on the session, down 2.1% and 3.4% respectively, as investors priced in heightened scrutiny of SaaS bundling strategies. Conversely, European software rivals like SAP SE (SAP) could see a competitive benefit if enforced unbundling creates more choice for enterprise customers.
A counter-argument exists that the integration of AI represents a genuine product enhancement that justifies a price premium, rather than an anti-competitive tying arrangement. Microsoft may argue that the cost of developing and running large language models like those powering Copilot necessitates the price adjustment. The outcome likely hinges on whether regulators view the AI features as a separate product market or an inherent upgrade to productivity software.
Trading flow data indicates institutional investors are reducing exposure to the software sector broadly and increasing hedges via options on the Technology Select Sector SPDR Fund (XLK). Short interest in Microsoft remains low at 0.8% of float, but put option volume on the stock surged to 220% of its 30-day average following the news.
The AGCM’s preliminary findings are expected within the next 90 days, a key catalyst for Microsoft’s stock. A formal statement of objections could trigger a further sell-off, while a dismissal would likely reverse the day’s losses. The European Commission may also choose to elevate the case to an EU-wide investigation under DMA provisions, a decision to watch for in the third quarter.
Key technical levels for MSFT are now the day’s low of $349.20, which represents critical support, and the 50-day moving average near $355.00, which will act as immediate resistance. A break below $345 could signal a deeper correction toward the $335 zone, a level that previously provided support in May 2026.
The company’s next earnings release on July 24 will be scrutinized for any commentary on European demand elasticity following the price increase and for updates on the financial contribution of AI features to the cloud segment.
U.S. investors should monitor the probe as a test case for how AI product integration is treated under European antitrust law. A negative outcome for Microsoft could establish a precedent that limits how other U.S. tech firms bundle new AI features into existing products, potentially capping revenue growth from these innovations for companies like Google and Adobe. This regulatory risk is now a tangible factor in software valuations.
The current probe differs from the U.S. case of the late 1990s, which focused on monopolizing the browser market. It is more analogous to the EU’s 2004 case against Windows Media Player, which alleged illegal tying of a separate product. The key modern distinction is the focus on price increases tied to product integration, a relatively novel angle in abuse of dominance cases.
Yes, that is a potential outcome. Italian regulators have the power to impose remedies, including requiring Microsoft to offer Office 365 subscriptions without AI features at a lower price point. Such a remedy could significantly impact Microsoft’s average revenue per user (ARPU) projections and force a recalibration of the company’s entire AI monetization strategy, not just in Italy but potentially across the EU.
Italy’s antitrust probe introduces a material regulatory overhang on Microsoft’s AI monetization strategy.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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