Australia\u2019s competition watchdog has launched legal action against Microsoft, accusing the tech giant of misleading consumers into purchasing higher-priced Microsoft 365 plans after the inclusion of its artificial intelligence assistant, Copilot.<\/p>\n
Regulator alleges misleading price push<\/p>\n
The Australian Competition and Consumer Commission (ACCC) said that, beginning in October 2024, Microsoft<\/a> misled roughly 2.7 million Australian customers by implying they needed to upgrade to new, more expensive personal and family subscription plans that featured Copilot.<\/p>\n According to the regulator, the annual price of the Microsoft 365 Personal plan rose by 45 per cent to A$159 ($103.32), while the Family plan increased by 29 per cent to A$179 ($117) following the AI assistant\u2019s integration.<\/p>\n Cheaper option hidden behind cancellation<\/p>\n The ACCC alleged that Microsoft failed to make clear that a lower-cost \u201cclassic\u201d version of Microsoft 365, without Copilot,<\/a> remained available. Consumers were reportedly only informed of this alternative after initiating the cancellation process, a design choice the regulator said breached Australian consumer law.<\/p>\n \u201cThe omission of such material information and the presentation of limited choices created a false impression about available options,\u201d the ACCC said.<\/p>\n Legal action and potential penalties<\/p>\n The commission is seeking financial penalties, consumer redress, injunctions, and legal costs from Microsoft Australia Pty Ltd and its US parent company, Microsoft Corp.<\/a><\/p>\n Under Australian law, companies found guilty of misleading conduct can face maximum fines of the greater of A$50 million, three times the benefit obtained, or 30 per cent of adjusted turnover during the breach period if the benefit cannot be calculated.<\/p>\n \u201cAny penalty that might apply to this conduct is a matter for the Court to determine and would depend on the Court\u2019s findings,\u201d the ACCC said, adding that it would not speculate on the outcome.<\/p>\n