Australia’s competition watchdog sues Microsoft for allegedly hiding cheaper subscription options to push customers towards pricier AI plans
SYDNEY: Australia’s competition watchdog has accused Microsoft of misleading customers into paying for its artificial intelligence assistant Copilot.
The Australian Competition and Consumer Commission announced it had filed suit in the Federal Court against Microsoft Australia and its parent company Microsoft Corporation.
Microsoft allegedly made false or misleading statements to approximately 2.7 million Australians who subscribe through auto-renewal to Microsoft 365 plans.
The software giant reportedly told customers they had only two choices: pay extra for Microsoft 365 services with Copilot or cancel their subscriptions completely.
Australia’s consumer watchdog revealed there was a partially hidden third option visible only when customers began cancelling.
Subscribers could maintain their existing “Classic” plans without Copilot for the original price according to the commission’s statement.
Commission chair Gina Cass-Gottlieb stated Microsoft deliberately omitted reference to the Classic plans in its communications.
She claimed Microsoft concealed these plans’ existence until after subscribers started cancellation processes to push consumers toward more expensive Copilot-integrated plans.
Cass-Gottlieb emphasised that Microsoft Office apps included in 365 subscriptions are essential for many people’s daily lives.
She noted that with limited substitutes available for the bundled package, cancelling subscriptions would be a difficult decision for most consumers.
The commission accused Microsoft of misleading subscribers on personal and family plans since October 31, 2024.
Annual subscriptions for Microsoft 365 plans with Copilot were between 29% and 45% higher than those without the AI assistant.
Australia’s consumer watchdog is seeking penalties, injunctions, consumer redress, and legal costs from Microsoft.
Microsoft could face penalties of 50 million Australian dollars or more for each breach of consumer law.
Microsoft did not immediately respond to a request for comment from AFP. – AFP
