Copilot Studio

Microsoft 365 Copilot Business licensing dependency on base licenses and Pay‑As‑You‑Go

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Posted on by Vektori1

Hi,

I would like to clarify Microsoft 365 Copilot Business licensing, it seems bit unclear.

Is a Microsoft 365 F3 license sufficient to publish Copilot Studio agents to Microsoft Teams or to Copilot for the entire organization, or do I need to purchase Microsoft 365 Copilot Business (18 €/user/month)?
In addition, if the tenant has Pay‑As‑You‑Go (Azure consumption) enabled for Copilot agents / AI usage:
1. I have Service user that is having F3 + Microsoft 365 Copilot Business (18 €/user/month) + Pay-as-you-go
  - Can Microsoft 365 Copilot Business (18 €/user/month) be cancelled after an agent has been published?
  - Will the published agent continue to work using Pay‑As‑You‑Go only, without the Copilot Business license?
  - (agent has been published to Teams or inside Copilot)

Kind regards: Vektori

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Publish & channel management

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Valantis 3,490 on at

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Hi @Vektori1,

A Microsoft 365 F3 plan is eligible as a base license for adding Microsoft 365 Copilot Business.

The €18 Copilot license unlocks integrated features in Word, Excel, Teams, and allows publishing and managing agents without consumption billing limits.

Pay‑As‑You‑Go (with an Azure subscription and billing policy) lets you run agents without the €18 license, but capabilities can be limited, and all usage will be billed per Copilot Credits.

If you publish an agent and then cancel the Copilot license, the agent can keep functioning only if Pay‑As‑You‑Go remains enabled. However, advanced agent authoring and embedded Copilot in M365 apps will stop for that user.

Best regards,

Valantis

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Vektori1 31 on at

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@Valantis Thanks for answer!

Pay‑As‑You‑Go (with an Azure subscription and billing policy) lets you run agents without the €18 license, but capabilities can be limited, and all usage will be billed per Copilot Credits.

Does this mean that when running only pay-as-you-go + F3, you don’t get the full publishing features for Teams and other custom capabilities? If so, what are those limitations?

What would be your recommendations for licenses for customers who want to run a Copilot Studio agent in Teams or Copilot?

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Valantis 3,490 on at

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Hi @Vektori1,

Publishing to Teams with PAYG + F3 is not restricted. You can publish fully.

The limitations:
- Every user interaction with the agent is billed per Copilot Credits via Azure. With M365 Copilot license, agent usage in Teams is zero-rated (not billed).
- Embedded Copilot in Word, Excel, Outlook is not included. That requires the M365 Copilot license.

rec:
- Low usage or testing: PAYG + F3 is fine, just watch the Azure costs.
- Regular usage in Teams: M365 Copilot Business makes more sense since agent interactions become zero-rated and you avoid per-credit billing.
- Users who also need Copilot in M365 apps: M365 Copilot Business is required.

Best regards,

Valantis

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Valantis 3,490 on at

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Hi @Vektori1,

Just wanted to check in and see if everything is working now. If you still need any help, feel free to let me know.

Also, if the issue is resolved, it would be great if you could mark the answer as solved so others with the same question can find it easily.

Thanks and have a great day!

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Vektori1 31 on at

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Hi @Valantis

One more thing,

Do you know when its considered fair use case?

1.Does fair use in Copilot Studio mean I can build and run an agent completely for free, or does it only apply under certain license conditions?

2.Under Copilot Studio fair use, what happens if the user interacting with the agent does NOT have a Microsoft 365 Copilot license, do Copilot Credits get consumed?

3.What are the steps to publish a Copilot Studio agent so that it qualifies under fair use, does the publishing channel matter or the datasources?

Eq. We want to deploy internally. Wondering if publishing to Teams vs a public website changes whether fair use applies.

4.Can I publish a fair use Copilot Studio agent directly to a SharePoint site, or does deploying to SharePoint break the fair use billing model?

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Valantis 3,490 on at

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Hi @Vektori1,

"Fair use" in Copilot Studio is a specific Microsoft billing term, not a general concept.

It means agent interactions don't consume Copilot Credits, but it's not free by itself. It's included in the Microsoft 365 Copilot license. Without that license per user, there's no fair use.

The two conditions that must both be true for fair use to apply:

- The user interacting with the agent has an M365 Copilot license
- The agent is running under that user's authenticated M365 Copilot identity

If a user doesn't have the license, their interactions are billed normally per Copilot Credits, no exceptions.

On the channel question: yes, the channel matters. Teams, SharePoint, and Microsoft 365 Copilot Chat are all internal channels where fair use applies, as long as the users are licensed. Publishing to a public website breaks it because external users don't have M365 Copilot licenses and aren't using authenticated M365 identities. So for your internal deployment, SharePoint and Teams both work fine under fair use.

For your scenario specifically: if all users have M365 Copilot Business licenses, publish to Teams or SharePoint, and they interact via their M365 identity, no credits

are consumed. Anyone without that license will generate billable usage.

Ref: https://learn.microsoft.com/en-us/microsoft-copilot-studio/requirements-messages-management

Best regards,

Valantis

✅ If this helped solve your issue, please Accept as Solution so others can find it quickly.

❤️ If it didn’t fully solve it but was still useful, please click “Yes” on “Was this reply helpful?” or leave a Like :).

🏷️ For follow-ups @Valantis.

📝 https://valantisond365.com/

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