Millions of Australians who use Microsoft 365 for daily tasks could soon see the company facing serious legal action over a pricing bombshell.
Microsoft told customers their plans were going up a whopping 45 percent if they wanted to keep using the latest version with Copilot, the artificial intelligence feature pulled into the package. What most people did not know, according to Australia’s consumer watchdog, is that saying no to Copilot let you keep the regular version at the same old price.
Only two choices landed in people’s inboxes: accept a bigger bill or cancel your subscription. The Australian Competition and Consumer Commission alleges there was a third route Microsoft failed to mention, which would have let users skip Copilot and hang onto their previous price.
What the ACCC Claims Microsoft Did Wrong
From late October, Copilot rolled out to personal and family plan subscribers in Microsoft 365. The watchdog says Microsoft’s messages and blog post at that time gave a misleading impression, essentially telling 2.7 million affected customers their only options were to pay more or leave the service. The trouble is, those who looked into cancelling suddenly got offered the “classic” plan without Copilot and with no increase.
Those price hikes were not minor. Personal plans jumped from $109 to $159 per year. Family plans climbed from $139 to $179.
According to ACCC Chair Gina Cass-Gottlieb, “We allege that Microsoft’s two emails to existing subscribers and the blog post were false or misleading as they conveyed that consumers had to accept the more expensive Copilot-integrated plans, and that the only other option was to cancel.”
She went on to point out that, for many, Microsoft’s suite of apps is deeply woven into work and personal life, meaning walking away entirely could never be a simple decision. Many, she said, might have picked the classic option if they had known.
Consumers only discovered the third option when they went through the process of cancelling their plan, the watchdog claims. The ACCC investigation drew on a mix of direct customer complaints and discussions on forums like Reddit.
Potential penalties, if Microsoft is found responsible, could reach $50 million or a percentage of total revenue, whichever turns out higher. The ACCC wants the court to force Microsoft to pay fines, issue refunds, and update customers.
Responding to the investigation, a Microsoft spokesperson said, “Consumer trust and transparency are top priorities for Microsoft, and we are reviewing the ACCC’s claim in detail.” The company stated it plans to work closely with regulators to ensure its conduct is legal and ethical. For more details about AI outages as demand strains capacity you can follow recent industry reports.
