Australia’s competition regulator has filed a lawsuit against Microsoft, accusing the tech giant of deceptive conduct that allegedly led millions of users to pay more for its AI assistant, Copilot, by concealing cheaper subscription options.
The Australian Competition and Consumer Commission (ACCC) announced on Monday that it has taken Microsoft Australia and its parent company, Microsoft Corp, to the Federal Court, alleging the company made “false or misleading” representations to about 2.7 million Australians subscribed to Microsoft 365.
According to the ACCC, Microsoft informed subscribers that they had only two choices — upgrade to Copilot-integrated Microsoft 365 plans at a higher price or cancel their subscriptions. However, a third, lesser-known option allowed users to stay on their previous “Classic” Microsoft 365 plans at the original rate, without Copilot.
“Microsoft deliberately omitted references to the Classic plans in its messaging and concealed their existence until after users began the cancellation process, with the apparent goal of pushing more customers toward the expensive Copilot plans,”
said ACCC Chair Gina Cass-Gottlieb.
She added that Microsoft’s actions were troubling given the essential role of Office applications in people’s work and personal lives, making users reluctant to cancel their subscriptions entirely.
The regulator claims the alleged misconduct began on October 31, 2024, with the Copilot-integrated plans costing 29% to 45% more than standard subscriptions.
The ACCC is seeking financial penalties, injunctions, consumer compensation, and legal costs, warning that Microsoft could face fines exceeding A$50 million (US$30 million) for each violation.
As of now, Microsoft has not issued an official response to the lawsuit.
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