Australia’s competition watchdog has accused Microsoft of misleading millions of customers into paying more for its AI assistant, Copilot, by allegedly hiding cheaper subscription options.
The Australian Competition and Consumer Commission (ACCC) announced on Monday that it had filed a lawsuit in the Federal Court against Microsoft Australia and its parent company, Microsoft Corp, claiming the tech giant made “false or misleading” statements to around 2.7 million Australians subscribed to Microsoft 365 plans.
According to the regulator, Microsoft informed customers that they only had two options, either pay extra for Microsoft 365 plans integrated with Copilot or cancel their subscriptions altogether. However, there was a partly hidden third option that allowed users to continue with the older “Classic” Microsoft 365 plans at the original price, without Copilot.
“Microsoft deliberately omitted reference to the Classic plans in its communications and concealed their existence until after subscribers initiated the cancellation process to increase the number of consumers on more expensive Copilot-integrated plans,” said ACCC chair Gina Cass-Gottlieb.
She added that Microsoft’s conduct was particularly concerning because Office apps are essential in many people’s professional and personal lives, making it unlikely that customers would easily choose to cancel their subscriptions.
The ACCC alleges that Microsoft misled personal and family plan subscribers since October 31, 2024, noting that the Copilot-integrated plans cost 29% to 45% more than the standard ones.
The commission is seeking penalties, injunctions, consumer redress, and legal costs, with Microsoft potentially facing fines of over A$50 million (US$30 million) for each breach.
Microsoft has not yet responded to requests for comment.
The Australian Competition and Consumer Commission (ACCC) announced on Monday that it had filed a lawsuit in the Federal Court against Microsoft Australia and its parent company, Microsoft Corp, claiming the tech giant made “false or misleading” statements to around 2.7 million Australians subscribed to Microsoft 365 plans.
According to the regulator, Microsoft informed customers that they only had two options, either pay extra for Microsoft 365 plans integrated with Copilot or cancel their subscriptions altogether. However, there was a partly hidden third option that allowed users to continue with the older “Classic” Microsoft 365 plans at the original price, without Copilot.
“Microsoft deliberately omitted reference to the Classic plans in its communications and concealed their existence until after subscribers initiated the cancellation process to increase the number of consumers on more expensive Copilot-integrated plans,” said ACCC chair Gina Cass-Gottlieb.
She added that Microsoft’s conduct was particularly concerning because Office apps are essential in many people’s professional and personal lives, making it unlikely that customers would easily choose to cancel their subscriptions.
The ACCC alleges that Microsoft misled personal and family plan subscribers since October 31, 2024, noting that the Copilot-integrated plans cost 29% to 45% more than the standard ones.
The commission is seeking penalties, injunctions, consumer redress, and legal costs, with Microsoft potentially facing fines of over A$50 million (US$30 million) for each breach.
Microsoft has not yet responded to requests for comment.
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