Australia’s competition authority has filed a lawsuit against Microsoft, alleging the company misled millions of Microsoft 365 users into paying higher subscription prices after Copilot integration without proper disclosure of cheaper options,.according to Reuters report.
Australia’s competition regulator has initiated legal proceedings against Microsoft, accusing the company of misleading millions of Microsoft 365 customers into paying higher subscription fees after artificial intelligence tool Copilot was bundled with personal and family plans.
Allegations by the regulator
According to the Australian Competition and Consumer Commission (ACCC), from October 2024 Microsoft influenced about 2.7 million users by implying they had to migrate to more expensive Microsoft 365 plans that included Copilot. The watchdog said Microsoft did not make it clear that a lower-priced “classic” plan without Copilot was still available to subscribers.
Price changes after Copilot integration
Following the Copilot integration, the annual Microsoft 365 personal plan price rose by 45% to A$159. The family plan saw a 29% increase, reaching A$179. The ACCC said Microsoft only disclosed the option to retain the cheaper plan during the cancellation flow, not upfront in its communications. Emails and blog posts sent earlier only informed users about forthcoming auto-renewal price increases.
What the ACCC seeks from the court
The ACCC is asking the court to impose penalties, grant consumer redress, and issue injunctions. It is also seeking costs from Microsoft Australia and its U.S. parent company. Under Australian consumer law, the maximum fine per breach can be the greater of A$50 million, three times the benefit gained, or 30% of adjusted turnover if the benefit cannot be quantified.
Microsoft’s initial response
Microsoft said it is reviewing the ACCC’s claim. The regulator added that any final penalty will be determined by the court based on its findings and declined to speculate on potential fines.
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