Australia Sues Microsoft Over Alleged Misleading Pricing Tactics
Australia’s competition watchdog has taken Microsoft to court, alleging the tech giant misled millions of customers into paying higher prices for Microsoft 365 by bundling it with its AI tool, Copilot.
Key Allegations
The Australian Competition and Consumer Commission (ACCC) claims Microsoft suggested approximately 2.7 million customers had to upgrade to more expensive Microsoft 365 Personal and Family plans that included Copilot. The price increases took effect from October 24.
- Personal Plan: Increased by 45% to A$159 annually
- Family Plan: Increased by 29% to A$179 annually
The regulator alleges Microsoft failed to clearly inform users that a cheaper “classic” plan without Copilot remained available. According to the ACCC, customers only discovered the cheaper option when they began the cancellation process.
“Microsoft’s previous communications through emails and a blog post failed to mention the cheaper alternative, only informing customers that the price increase would apply at the next auto-renewal,” the ACCC stated.
Legal Action and Potential Penalties
The ACCC is seeking:
- Substantial penalties against Microsoft Australia Pty Ltd and Microsoft Corp
- Consumer compensation
- Legal costs and injunctions
Maximum penalties per breach could reach the highest of A$50 million, three times the attributable benefits, or 30% of Microsoft’s adjusted turnover during the breach period. The final penalty determination rests with the court.
Microsoft’s Response
A Microsoft spokesperson confirmed the company is “reviewing the ACCC’s claim in detail” in response to the lawsuit.
