Australia sues Microsoft for allegedly misleading ~2.7M Microsoft 365 users into accepting a price hike for Copilot plans while hiding cheaper non-AI options
- Microsoft 365 personal plan price increased by 45% — Cheaper ‘classic’ plan only revealed during cancellation process
Reuters Sneha Kumar
Context & Ripple Effects
Microsoft first added Copilot to consumer Microsoft 365 plans in Australia and Southeast Asia alongside a price increase, after establishing a far higher per-user Copilot price for business accounts. The consumer rollout then moved to bundling AI-powered Office features into Personal and Home subscriptions.
This lawsuit focuses on the choice architecture around that rollout: whether customers could readily remain on a cheaper non-AI tier. It also fits a widening scrutiny pattern, with Italy examining similar disclosure issues around Microsoft 365's AI-linked price increase.
First-order effects
- Microsoft faces a consumer-protection case over how it presented the Copilot-inclusive plans and the availability of the cheaper classic alternative to roughly 2.7 million users.
- Affected Microsoft 365 customers may receive clearer plan-comparison and cancellation-path disclosures while the allegation is tested; Microsoft must defend its subscription messaging and pricing flow.
Second-order effects
- Microsoft may need to make non-AI alternatives more visible, reducing the effectiveness of bundling Copilot into the default consumer subscription path.
- The Australian case gives other regulators and subscription-software providers a concrete test of whether AI upgrades can be paired with price rises when lower-cost legacy plans are hard to find.
Third-order effects
- If regulators treat concealed downgrade options as misleading, AI monetization will depend less on default bundling and more on demonstrable, clearly priced customer choice.
- The broader pressure is toward separating AI feature value from base productivity subscriptions, particularly where providers use existing customer bases to recover AI investment costs.
The trend: AI vendors are testing subscription bundles as a route to monetization, while regulators increasingly scrutinize whether customers can meaningfully opt out of the AI-priced tier.
Related: Microsoft · Australia · AI access arbitrage · Microsoft adds Copilot to Microsoft 365 in Australia and Southeast Asi · Microsoft bundles its AI-powered Office features into Microsoft 365 Pe · Italy is investigating Microsoft 365's price hike, saying Microsoft di
Related Coverage
- Microsoft in court for allegedly misleading millions of Australians over Microsoft 365 subscriptions Australian Competition and Consumer Commission
- ACCC sues Microsoft for allegedly misleading millions of Australians with Microsoft 365 subscription hikes ABC
- Australia is Suing Microsoft Over Misleading Microsoft 365 Price Hikes Thurrott · Laurent Giret
- Australia sues Microsoft for misleading M365 users about Copilot subscription options The Register · Simon Sharwood
- Australian watchdog sues Microsoft for misleading 2.7 million M365 users — deliberately hiding a cheaper Classic subscription plan without Copilot Windows Central · Kevin Okemwa
- Microsoft sued for allegedly misleading millions of Australians with its AI pricing The Guardian · Josh Taylor
- Microsoft sued in Australia over alleged deceptive Copilot bundling Computerworld · Gyana Swain
- Australia Targets Microsoft in Lawsuit Over AI-Related 365 Price Rises eWeek
- Australia's consumer agency sues Microsoft over 365 pricing UPI · Chris Benson
- Microsoft 365 price hikes ‘deliberately mislead’ consumers, company sued Neowin · Usama Jawad
- Australia sues Microsoft over Copilot-linked Microsoft 365 price hikes and ‘hidden’ classic plan" BonTech Labs · Gavin Bonshor
- ACCC sues Microsoft over a “hidden” cheaper plan tied to Copilot price hikes Implicator.ai · Maria Garcia
- Microsoft 365 price hikes have landed the tech giant in hot water ITPro · Emma Woollacott
- Microsoft facing huge lawsuit involving millions of citizens over unfair software pricing - here's what we know TechRadar · Mike Moore
- Microsoft Sued in Australia Over 365 Price Hikes Tied to AI Copilot Rollout Decrypt · Vismaya V
- Microsoft Faces ACCC Lawsuit Over Misleading Microsoft 365 Price Hikes in Australia Windows Report · Rishaj Upadhyay
- Microsoft is being sued with the claim that it “deliberately hid” cheaper Microsoft 365 plans XDA Developers · Simon Batt
- Microsoft accused by Australia of ‘misleading’ 365 customers Capacity · Amber Jackson
- Australia Accuses Microsoft of Misleading Consumers With AI-Driven 365 Price Hikes Tech Times · Madelaine Panganiban
- Microsoft Sued by Australian Watchdog Over AI Pricing Dow Jones Newswires · Stuart Condie
- Microsoft Under Fire In Australia After Watchdog Says Tech Giant Misled 2.7 Million Users Into Paying Higher Fees After AI Copilot Integration Benzinga · Ananya Gairola
- Microsoft 365 price hikes misled Australians, ACCC says Information Age · Tom Williams
- ACCC accuses Microsoft of misleading 2.7 million Australians over M365 fees iTnews · Andrew Colley
- Microsoft ‘tricked users into pricier AI-linked 365 plans,’ says Australian watchdog; files lawsuit Livemint · Govind Choudhary
- Microsoft accused of misleading millions of Australians Sydney Morning Herald · Elias Visontay
- Australia sues Microsoft over ‘misleading’ AI offer The Economic Times
- ACCC takes Microsoft to court over allegations of “misleading millions of Australians” Cyber Daily · David Hollingworth
- Consumer watchdog alleges Microsoft Australia misled 2.7 million Australians to buy more expensive subscription plan 9News · Yashee Sharma
- ACCC takes Microsoft to court for misleading 2.7m Microsoft 365 subscribers Capital Brief
- ACCC takes Microsoft to court over alleged misleading conduct Mediaweek
- Microsoft in court for allegedly misleading millions of Australians over Microsoft 365 subscriptions https://www.accc.gov.au/... Consumers were told they must accept Copilot & pay more, or cancel. But there was a secret 3rd option to carry on as before, but only if they began cancellation process. @brucelawson@social.vivaldi.net · Bruce Lawson
- The ACCC has commenced proceedings in the Federal Court against Microsoft Australia and its parent company Microsoft Corporation for allegedly misleading approximately 2.7 million Australian customers when communicating subscription options and price increases, after it integrated its AI assistant, Copilot, into Microsoft 365 plans. … @NewtonMark@eigenmagic.net · Mark Newton
- “Australia takes Microsoft to court, says it misled 2.7 million customers [...] about subscription options and price increases, after it integrated its AI assistant, Copilot, into Microsoft 365 plans” — https://www.reuters.com/... This is a very widely known thing that Microsoft did worldwide as the latest subscriptions restructuring. @b9AcE@todon.eu
- Microsoft in court for allegedly misleading Australians over 365 subscriptions Hacker News
Discussion
-
@acccgovau
@acccgovau
on x
We've commenced proceedings in the Federal Court against Microsoft for allegedly misleading Australian customers when communicating subscription options and price increases, after it integrated its AI assistant, Copilot, into Microsoft 365 plans. https://www.accc.gov.au/... [imag…
-
@accan_au
@accan_au
on x
ACCAN welcomes the @acccgovau's action against @Microsoft for allegedly misleading millions of customers. Unfortunately, this kind of conduct has become all too familiar for Australians. There are persistent structural issues in Australia's digital markets, where dominant global
-
@consumer_action
@consumer_action
on x
“This is exactly the sort of case our consumer regulator should be taking to protect ordinary Australians in a concentrated market.” @FCAupdate @natdebthelpline @acccgovau https://www.abc.net.au/...
-
@wavesblog
Simonetta Vezzoso
on x
What are our EU and national enforcers busy with these days, I wonder? This is such a low hanging fruit @beuc - and a possible topic for the next DMA HLG
-
@mumbletwits
Peter Brent
on x
Good. Now, if @acccgovau could look at the outrageous dodgy @Adobe, who recently 1. More than doubled monthly fee for Creative Cloud 2. Hit me with a ~$650 fee when I hit “cancel” (3. I ended up avoiding that fee by subscribing to Acrobat Pro only.) 😡 https://www.abc.net.au/...
-
@richardtroupe
Richard Troupe
on bluesky
A while ago, I had an Office 365 subscription for work purposes, and went to change my account due to Microsoft shoehorning AI into it. — They didn't offer the chance to downgrade, instead only offering me to accept AI with added costs or outright cancel. — You can guess what…
-
@magnificom
Margaret
on bluesky
I hate when it just pops up like they're trying to make me use it. It just slows everything down. — They're shoving it down people's throats. It's so unnecessary! [embedded post]
-
@rewhan
@rewhan
on bluesky
Asking for probably the millionth time, but: — If AI's so great, why do you have to trick people into using it? [embedded post]
-
@raymondwilton
Raymond Wilton
on bluesky
www.theguardian.com/australia- ne... According to Australia's consumer watchdog, the tech giant allegedly failed to share that a third option was available - pay the same lower price and opt out of the AI, named Copilot, in Microsoft 365.
-
@picketer
Tim Lyons
on bluesky
I get my 365 bundled with something else and even when I've tried (to the point of saying I don't care about the cost how do I just turn the copilot etc shite off so I never see it again) I've been to told no. [embedded post]
-
@kels316
Adam
on bluesky
if you didn't know: you have to click to cancel your subscription then it gives you the option to subscribe to a cheaper tier without the AI shit. [embedded post]
-
@eliseswritings
Elise
on bluesky
I love that we have the ACC (Australian Competition and Consumer Commission) to hit back when corporations pull stunts like Microsoft's ram AI down people's throats and charge them extra for it, without presenting alternatives, one. [embedded post]
-
@yungenchee
Yung En Chee
on bluesky
Australian Competition and Consumer Commission (ACCC) sues Microsoft for it's asshole move telling people to pay extra for Office suite with shitty Copilot or cancel, without revealing the 3rd option of just paying the same amount sans Copilot — GF Microsoft! [embedded post]
-
@jilldlawrence
Jill Lawrence
on bluesky
I figured out how to do this from others online after tons of research and months of co-pilot telling me, a writer, that I needed its help to write. (Spoiler: I did not.) I was erupting in frustration and trying to shut it up 25 times a day. I'm so glad Australia is suing Micr…
-
@joshtaylor
Josh Taylor
on bluesky
Microsoft forced its AI into 365 and wanted people to pay extra for the privilege. Didn't make it obvious that there was an option without AI. — The ACCC is now suing them over it. www.theguardian.com/australia- ne...
-
@leanneveronica
Leanne Veronica
on bluesky
The ACCC has commenced proceedings against Microsoft for allegedly misleading approximately 2.7 million Australian customers when communicating subscription options & price increases, after it integrated its AI assistant, Copilot, into Microsoft 365 plans: — #auslaw
-
r/BuyFromEU
r
on reddit
Australia sues Microsoft over AI-linked subscription price hikes
-
r/assholedesign
r
on reddit
Australian Competition and Consumer Commission sues Microsoft for allegedly misleading millions of Australians with Microsoft 365 subscription hikes
-
r/BetterOffline
r
on reddit
Microsoft in court for allegedly misleading millions of Australians over Microsoft 365 subscriptions
-
r/australia
r
on reddit
ACCC suing Microsoft for allegedly misleading approximately 2.7 million Australians over its Microsoft 365 subscriptions
-
r/technology
r
on reddit
Australia takes Microsoft to court, says it misled 2.7 million customers