Australia’s competition regulator has filed a lawsuit against Microsoft, accusing the tech giant of misleading millions of customers into paying inflated prices for its Microsoft 365 software after bundling it with the artificial intelligence tool Copilot, reports Reuters.
The Australian Competition and Consumer Commission (ACCC) alleged that since October 2024, Microsoft misled about 2.7 million users by suggesting they needed to upgrade to higher-priced Microsoft 365 Personal and Family plans that included Copilot.
Following the integration, the annual subscription price of the Microsoft 365 Personal plan rose by 45% to A$159 (US$103.32), while the Family plan increased by 29% to A$179, the ACCC said.
According to the regulator, Microsoft failed to clearly inform customers that a cheaper “classic” version of Microsoft 365—without Copilot—remained available. The ACCC claimed that users only discovered the lower-cost option after initiating the cancellation process, a design it said breached Australian consumer law by omitting key information and creating a misleading impression of available choices.
The watchdog also noted that Microsoft’s customer communications, including emails and a blog post, made no mention of the cheaper alternative, merely notifying users that price increases would apply at their next auto-renewal.
A Microsoft spokesperson said in an emailed statement that the company was “reviewing the ACCC’s claim in detail.”
The ACCC is seeking penalties, consumer redress, injunctions, and costs from Microsoft Australia Pty Ltd and its U.S. parent company, Microsoft Corp.
Under Australian consumer law, the maximum penalty for each breach is the greater of A$50 million, three times the value of any benefits obtained, or 30% of a company’s adjusted turnover during the breach period if the benefits cannot be quantified.
“Any penalty that might apply to this conduct is a matter for the Court to determine and would depend on the Court’s findings,” the ACCC said. “The ACCC will not comment on what penalties the Court may impose.”
Bd-pratidin English/ Jisan
