Australia’s competition watchdog has filed a lawsuit against Microsoft, accusing the tech giant of deceiving millions of customers into paying inflated prices for its Microsoft 365 subscriptions following the integration of its artificial intelligence assistant, Copilot.
The Australian Competition and Consumer Commission (ACCC) lodged the case on Monday, alleging since October 2024, Microsoft misled about 2.7 million users by implying they had to switch to higher-priced Microsoft 365 personal and family packages that included Copilot.
According to the ACCC, after Copilot was added, the annual subscription fee for Microsoft 365’s personal plan rose by 45% to A$159 ($103.32), while the family plan increased by 29% to A$179.
The regulator claimed Microsoft did not make it clear that a lower-cost “classic” version of the software- without Copilot- remained available to customers. The cheaper plan was reportedly disclosed only after users began the process of cancelling their subscriptions.
The ACCC argued this design choice breached Australian consumer law by failing to provide essential information upfront and by creating a misleading impression of the options available.
