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Australia sues Microsoft for allegedly misleading millions of customers over Copilot-linked price hikes
The ACCC further alleged that Microsoft’s emails and blog posts announcing the price increases did not reference the cheaper plan, instead notifying users that the higher prices would apply automatically at renewal.
The ACCC further alleged that Microsoft’s emails and blog posts announcing the price increases did not reference the cheaper plan, instead notifying users that the higher prices would apply automatically at renewal.
Microsoft has been taken to court in Australia after the country’s competition regulator accused the technology giant of misleading millions of customers into paying higher prices for its Microsoft 365 software by bundling it with its artificial intelligence tool, Copilot.
According to Reuters, the Australian Competition and Consumer Commission (ACCC) filed a lawsuit alleging that Microsoft misled around 2.7 million users by suggesting they were required to switch to more expensive Microsoft 365 Personal and Family plans that included Copilot. According to the regulator, the pricing changes took effect on 24 October, increasing the annual subscription cost of the Personal plan by 45% to A$159 (US$103.32) and the Family plan by 29% to A$179.
The ACCC claims that Microsoft failed to clearly inform customers that a cheaper “classic” version of Microsoft 365, without Copilot, remained available. The option to retain the lower-cost plan was reportedly disclosed only after customers began the cancellation process.
The regulator argues that Microsoft’s conduct breached Australian consumer law by withholding key information and creating a false impression about available subscription choices. It further alleged that Microsoft’s emails and blog posts announcing the price increases did not reference the cheaper plan, instead notifying users that the higher prices would apply automatically at renewal.
The ACCC is seeking penalties, consumer compensation, injunctions, and legal costs from both Microsoft Australia Pty Ltd and its US parent company, Microsoft Corp. Under Australian consumer law, the maximum fine per breach is the greater of A$50 million, three times the value of any benefits gained, or 30% of the company’s adjusted turnover during the period of the breach if the benefit cannot be determined.
The ACCC said the final decision on penalties rests with the court and declined to comment on potential outcomes.
In response, a Microsoft spokesperson told Reuters via email that the company was “reviewing the ACCC’s claim in detail.”
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