Microsoft has apologised to Australian customers and announced refunds for millions of subscribers affected by a price hike tied to its artificial intelligence (AI) rollout.
The tech giant confirmed on Thursday that it would reimburse Microsoft 365 Personal and Family users who paid higher subscription fees following the integration of its AI assistant, Copilot.
The controversy stems from Microsoft’s 2024 decision to increase the annual cost of its 365 Personal plan by 45 per cent—from AUD 109 to AUD 159—and its Family plan by 29 per cent, from AUD 139 to AUD 179. The company faced widespread criticism for failing to clearly inform customers that cheaper, non-AI plans were still available.
In an email to subscribers, Microsoft said it “fell short” of its standards for transparency and trust. The company apologised for not being clearer about subscription options and confirmed that eligible customers can switch to lower-cost, non-AI “Classic” plans and claim refunds for payments made after November 30, 2024. Refunds will be processed within 30 days of switching.
According to The Guardian, around 2.7 million Australians are expected to qualify for refunds. The apology follows legal proceedings by the Australian Competition and Consumer Commission (ACCC), which says Microsoft gave customers the impression that they had to keep the AI add-on or cancel their plan altogether.
If found in breach of consumer law, Microsoft could face penalties of up to AUD 50 million or a fine equivalent to three times the value of the misleading conduct.
The company’s response comes amid increasing scrutiny of how global tech firms are introducing—and pricing—AI-driven tools for everyday users.
Microsoft to refund Australian customers after AI-linked price hike backlash
