Australia’s competition regulator, the ACCC, has filed a lawsuit against Microsoft, alleging the company misled around 2.7 million customers into paying higher prices for its Microsoft 365 plans after integrating its AI tool Copilot.
According to the ACCC, from October 2024, Microsoft suggested users had to upgrade to more expensive Microsoft 365 Personal and Family plans that included Copilot, while failing to clearly disclose that a cheaper “classic” plan without Copilot was still available.
Following the integration, annual subscription prices rose 45% to A$159 ($103) for the personal plan and 29% to A$179 for the family plan. The cheaper option was reportedly revealed only during the cancellation process, which the regulator said breached Australian consumer law by creating a false impression of available choices.
Microsoft’s emails and blog posts at the time did not mention the cheaper alternative, instead informing users of the upcoming price increase at auto-renewal.
The ACCC is seeking penalties, refunds, injunctions, and legal costs from Microsoft Australia and Microsoft Corp. The maximum fine per breach could reach the greater of A$50 million, three times the benefit gained, or 30% of adjusted turnover during the breach period.Microsoft said it is reviewing the ACCC’s claims in detail.