Accusation of violating consumer protection laws
The Australian Competition and Consumer Commission (ACCC) has sued Microsoft Australia Pty Ltd and its parent company in the United States, Microsoft Corp. with the accusation of deceiving consumers when increasing the price of the Microsoft 365 subscription package after integrating the Copilot artificial intelligence tool.
According to the accusation, since October 2024, Microsoft has caused about 2.7 million customers in Australia to pay more money because they believed they were forced to switch to high-end Microsoft 365 packages (individually and family) with Copilot.
After adding the AI feature, the price of the individual package increased by 45% to 159 AUD/year (about 103 USD), while the family package increased by 29% to 179 AUD/year.
However, ACCC said that Microsoft did not clearly announce that users could continue to use the old cheaper plan, which did not include Copilot.
According to the ACCC, Microsoft violated Australian consumer protection laws by not disclosing sensitive information, creating a false impression that users have no choice but to upgrade.
The agency said that the option to keep the cheaper package is only revealed when users start the registration cancellation process, an behavior that is considered a misunderstanding design.
Microsoft's previous emails and blog posts only announced the price increase, without mentioning the cheaper classic package.
Microsoft's response and risk of heavy fines
In an email response, a Microsoft spokesperson said the company was reviewing the details of the ACCC complaint and had not yet commented further.
The ACCC requires the Australian Federal Court to impose penalties including consumer compensation, a ban on similar acts and litigation costs.
According to Australian law, the maximum fine for each violation can be 50 million AUD, or three times the benefits gained, or 30% of the adjusted revenue during the violation period.
Any punishment will be decided by the court based on the severity of the violation, the ACCC said, stressing that the incident is a warning to global companies about transparency in deploying AI products and changing service prices.
