The Australian Competition and Consumer Commission (ACCC) has launched legal action against Microsoft, alleging the company misled millions of Microsoft 365 users in Australia over its Copilot price hike.
According to the ACCC, since October 2024, Microsoft informed subscribers that to continue using Copilot integration, they had to switch to new, more expensive plans — with prices increasing by up to 45 percent — or cancel their subscriptions.
However, customers were not told that they could keep their existing Microsoft 365 Classic plans at lower rates. These plans excluded Copilot but remained available — though only visible after starting the cancellation process.
ACCC Alleges Deceptive Conduct by Microsoft
ACCC Chair Gina Cass-Gottlieb stated that Microsoft’s omission appeared to be a deliberate attempt to steer users toward higher-cost, AI-integrated subscription plans.
She explained that by hiding the Classic plan options, Microsoft potentially denied users the ability to make fully informed decisions about their subscriptions.
The ACCC’s case relies on two subscriber emails and a Microsoft blog post, both of which failed to mention the lower-priced Classic options.
Legal Action and Potential Consequences
The ACCC is seeking penalties, injunctions, and compensation for the estimated 2.7 million affected customers.
If proven, Microsoft’s actions could represent a breach of Australian Consumer Law, which prohibits deceptive or misleading business conduct.
The case highlights growing regulatory scrutiny of AI subscription pricing models, especially as global tech companies integrate tools like Copilot into productivity software.
Source and References
- Source: Business News Australia – Microsoft accused of misleading customers over Copilot plans
- Read more on Australia tech news: 360 News Orbit – Australia