Australia’s competition watchdog, the Australian Competition and Consumer Commission (ACCC), has initiated legal proceedings against Microsoft, accusing the tech giant of misleading millions of customers into paying significantly higher prices for its Microsoft 365 software. The lawsuit centers on Microsoft’s bundling of its artificial intelligence tool, Copilot, with the software, which allegedly forced users to upgrade to more expensive plans without clear disclosure of cheaper alternatives. According to the ACCC, the annual subscription cost for Microsoft 365 personal plans surged by 45% to A$159 ($103.32), while family plans increased by 29% to A$179 after the integration of Copilot. The regulator claims that Microsoft failed to inform users about the availability of a cheaper ‘classic’ plan without Copilot until they initiated the cancellation process. This omission, the ACCC argues, violates Australian consumer law by withholding critical information and creating a false impression of available options. Microsoft has stated that it is reviewing the ACCC’s claims. The regulator is seeking penalties, consumer redress, injunctions, and costs from both Microsoft Australia Pty Ltd and its U.S. parent company, Microsoft Corp. The potential penalties could reach up to A$50 million per breach or three times the benefits obtained from the alleged misconduct. The ACCC emphasized that any penalties would ultimately be determined by the court.
Australia sues Microsoft for misleading customers into paying 45% more for AI-linked software
