Australia’s consumer regulator has launched legal action against Microsoft, accusing the technology giant of misleading more than 2.5 million local customers over pricing and renewal options for Microsoft 365 subscriptions.
The Australian Competition and Consumer Commission (ACCC) filed proceedings in the Federal Court on Monday, alleging that Microsoft “deliberately hid” a lower-cost renewal option from Australian users after integrating its AI assistant, Copilot, into 365 plans earlier this year.
According to ACCC Chair Gina Cass-Gottlieb, Microsoft failed to disclose that customers could retain their existing subscription at the original price. “We allege Microsoft deliberately hid this third option, to retain the old plan at the old price, in order to increase uptake of Copilot and drive revenue from the new integrated plans,” she said in a statement.
The regulator claims users were instead told they would need to either cancel their plan or accept a higher-priced version bundled with Copilot. The ACCC says it will pursue penalties significant enough to send a message that non-compliance with consumer law “is not just a cost of doing business.”
Microsoft, in its response, said it is reviewing the ACCC’s allegations and remains committed to cooperating with the regulator. “Consumer trust and transparency are top priorities,” the company said in a statement to ABC News Australia.
The case adds to mounting scrutiny of Microsoft’s practices globally. Late last year, digital rights groups in the UK filed a billion-dollar suit accusing the company of overcharging for server software used in cloud systems. Microsoft has also been under investigation in the US, Canada, and here in Australia over cyberattacks that hit government and business networks.
This lawsuit is a big deal for Australia's effort to keep closer tabs on tech giants, particularly as AI keeps showing up everywhere in subscription services.
Australia sues Microsoft over alleged 365 pricing deception tied to Copilot plans
