Australia’s competition regulator has filed a lawsuit in the Federal Court against Microsoft, accusing the tech giant of misleading millions of customers into paying higher prices for its AI assistant, Copilot.
The Australian Competition and Consumer Commission (ACCC) alleged that since October 2024, Microsoft misled about 2.7 million customers by implying they had to switch to more expensive Microsoft 365 plans that included Copilot, Reuters reported.
According to the ACCC, Microsoft informed customers that they had only two options — pay extra for Microsoft 365 with Copilot or cancel their subscriptions.
However, a third, cheaper “Classic” plan without Copilot was available but revealed only when users initiated the cancellation process.
Following Copilot’s integration, the annual Microsoft 365 Personal plan rose by 45% to A$159 (₹8,800), while the Family plan increased by 29% to A$179 (₹9,900).
The regulator said Microsoft’s emails and blog posts failed to mention the cheaper plan, instead telling customers that price hikes would apply automatically at renewal.
The ACCC is seeking penalties, consumer redress, and injunctions. Each breach could result in fines of up to A$50 million (₹27.5 crore) or 30% of Microsoft’s turnover, depending on the Court’s ruling.
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