Key Points
- Australia’s competition regulator is suing Microsoft over its pricing for Microsoft 365.
- The lawsuit claims Microsoft misled customers into paying for a more expensive plan with its new AI Copilot.
- Microsoft allegedly failed to clearly inform users that a cheaper, “classic” plan was still available. The price of the personal plan jumped by 45%.
- The regulator is seeking major penalties and refunds for the 2.7 million affected customers.
Australia’s competition watchdog is suing Microsoft, accusing the tech giant of misleading customers into paying higher prices for its Microsoft 365 subscriptions. The lawsuit claims that when Microsoft bundled its new AI assistant, Copilot, into its personal and family plans, it didn’t make it clear that a cheaper, “classic” plan was still available.
The Australian Competition and Consumer Commission (ACCC) alleges that Microsoft misled about 2.7 million customers. After the Copilot integration, the price of the Microsoft 365 personal plan jumped by 45%, and the family plan by 29%.
The problem, according to the ACCC, is that Microsoft didn’t clearly inform users they could keep their old, cheaper plan without Copilot. This option was revealed only when customers tried to cancel their subscriptions, a design the regulator says breaches Australian consumer law.
“We allege that Microsoft failed to provide consumers with clear and adequate information about the availability of cheaper Microsoft 365 plans,” an ACCC official said.
The ACCC is now seeking penalties, which could be massive. The maximum penalty for each breach is A$50 million, and with 2.7 million customers allegedly affected, the total could be huge. The regulator is also asking for consumer refunds and an injunction to stop Microsoft from continuing the practice.
