Australia takes Microsoft to court over 'misleading' AI offer
Australia’s competition watchdog has filed a lawsuit against Microsoft, accusing the tech giant of misleading customers into paying extra for its AI assistant, Copilot.
The case was lodged in the Federal Court against Microsoft Australia and its parent company, Microsoft Corp, News.Az reports, citing AFP.
The Australian Competition and Consumer Commission (ACCC) claims Microsoft made “false or misleading” statements to around 2.7 million Australians subscribing to Microsoft 365 plans through auto-renewal. Customers were allegedly told they had two choices: pay more for Copilot-integrated Microsoft 365 services or cancel their subscriptions.
However, the ACCC says there was a third option, hidden until subscribers began the cancellation process: staying on the existing “Classic” plans without Copilot at the original price.
“Microsoft deliberately omitted reference to the Classic plans in its communications and concealed their existence until after subscribers initiated the cancellation process to increase the number of consumers on more expensive Copilot-integrated plans,” ACCC Chair Gina Cass-Gottlieb said.
The watchdog notes that Microsoft Office apps are essential for many users, with limited substitutes for the bundled package, making subscription cancellations a significant decision.
The alleged misleading conduct affects personal and family plans since October 31, 2024, and annual subscriptions for Copilot-integrated plans were 29–45% higher than those without, according to the ACCC.
The commission is seeking penalties, injunctions, consumer redress, and costs. Microsoft could face fines of AU$50 million (US$30 million) or more per breach if found liable.
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