Post by : Bianca
Haleem
The Australian Competition and Consumer Commission (ACCC) has filed a lawsuit against Microsoft, alleging the tech company misled approximately 2.7 million users of Microsoft 365, driving them to more expensive plans with the introduction of its AI feature, Copilot.
Since October 2024, the ACCC claims Microsoft's alterations to pricing have made it appear that users needed to opt for pricier subscriptions that included Copilot, failing to adequately inform them about the availability of less costly, “classic” plans.
After implementing Copilot, the personal Microsoft 365 plan saw a significant price increase of 45%, now costing A$159 annually, while the family plan rose by 29% to A$179. Users reportedly found out about the older, cheaper options only when attempting to cancel their subscriptions, rather than through initial communications.
Microsoft's emails and blog updates predominantly emphasized auto-renewal price hikes, neglecting to mention the cheaper alternatives. The ACCC contends this lack of transparency misled customers and violated Australian consumer protection regulations.
As the regulator pushes for court-ordered penalties, consumer refunds, and measures to prevent future breaches, Microsoft could face fines up to A$50 million for each infraction, or 30% of its adjusted turnover if gains from the breaches cannot be accurately determined.
Microsoft has stated that it is looking into the allegations, reflecting increasing global scrutiny on tech companies regarding their pricing strategies and communication around AI-related enhancements.
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