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Consumer protection

Microsoft Faces Lawsuit Over Alleged Misleading Pricing for AI-Powered Microsoft 365 Subscription

Strategic Insights

— 2 min read

Microsoft, the global technology giant, has been slapped with a major lawsuit by the Australian Competition and Consumer Commission (ACCC), alleging that the company misled approximately 2.7 million Australian customers into purchasing more expensive Microsoft 365 subscription plans that bundled its artificial intelligence assistant, Copilot. The ACCC claims that Microsoft failed to clearly disclose a cheaper, 'classic' version of the product without the AI features, leading to price increases of up to 45% for some plans.

Key Takeaways:

  • The Australian Competition and Consumer Commission (ACCC) has launched a major lawsuit against Microsoft, alleging that the company misled Australian customers into purchasing more expensive Microsoft 365 subscription plans.
  • The ACCC claims that Microsoft failed to clearly disclose a cheaper, 'classic' version of the product without the AI features, leading to price increases of up to 45% for some plans.
  • The lawsuit alleges that Microsoft concealed the continued availability of the lower-cost, non-AI "classic" subscription, only informing consumers about this cheaper alternative after they initiated the process to cancel their subscription.
  • The ACCC is seeking substantial financial penalties, consumer redress for the overcharged customers, injunctions against future misleading conduct, and legal costs.
  • Under Australian consumer law, companies found guilty of misleading conduct can face maximum fines up to the greater of A$50 million, three times the benefit obtained from the breach, or 30% of the company's adjusted turnover during the period of the alleged violation.
  • Microsoft has not yet issued a public statement regarding the proceedings, which will now move through the Australian courts.
  • The ACCC alleges that Microsoft's marketing and user interface implied that consumers were required to upgrade to the new and pricier personal and family subscription tiers featuring the GPT-powered Copilot.
  • The AI-powered Copilot promises to ease complex workflows, but its integration has led to increased prices for Microsoft 365 subscription plans, with the annual price of the Microsoft 365 Personal plan rising by 45% to A$159 (approximately $103).
  • The Family plan saw a 29% increase to A$179 (approximately $117) after the integration of the AI assistant.

Statistics:

  • Approximately 2.7 million Australian customers were allegedly misled into purchasing more expensive Microsoft 365 subscription plans.
  • The annual price of the Microsoft 365 Personal plan rose by 45% to A$159 (approximately $103).
  • The Family plan saw a 29% increase to A$179 (approximately $117) after the integration of the AI assistant.
  • The ACCC is seeking maximum fines up to the greater of A$50 million, three times the benefit obtained from the breach, or 30% of the company's adjusted turnover during the period of the alleged violation.

Sources:

  • Australian Competition and Consumer Commission (ACCC) - "Microsoft Faces Lawsuit Over Alleged Misleading Pricing for AI-Powered Microsoft 365 Subscription" (date not specified)
  • IE Online Media Services Pvt. Ltd. - "Microsoft in trouble again: Australian watchdog files lawsuit over AI-powered Microsoft 365 subscription" (Copyright 2025 IE Online Media Services Pvt. Ltd., distributed by Contify.com)

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