The company will specifically be more transparent about auto-renewing contracts.
The Competition and Markets Authority (CMA) has worked with Microsoft to change how auto-renewing Xbox subscriptions work in the UK.
The regulator had been investigating Microsoft after hearing concerns about how auto-renewing subscriptions for online services like Xbox Live and Xbox Game Pass were being handled by the company.
The CMA was specifically looking at whether Microsoft had been upfront about auto-renewing contracts, how easy it was for subscribers to turn off automatic renewal, and whether people were aware they were still paying for services they no longer used.
Although the CMA didn't lay out its findings in detail, it said it has "secured undertakings with Microsoft" to address those particular concerns.
As a result, Microsoft has agreed to provide customers with better upfront information to help them understand the nature of their Xbox memberships, and will now contact existing customers on recurring 12-month contracts to let them end their membership and claim a pro-rata refund.
Microsoft will also reach out to existing customers who haven't used their memberships for a long time but are still paying, letting them know how to halt their payments if required.
Finally, the console maker will provide clearer notifications relating to price hikes, and will ensure customers know how to switch off auto-renewals if they don't agree with the new price point.
The CMA's executive director of enforcement, Michael Grenfell, said the outcome is about giving consumers the necessary information to make informed purchasing decisions.
"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," commented Grenfell.
"Other companies offering memberships and subscriptions that auto-renew should take note, and review their practices to ensure they comply with consumer protection law."
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