ACCC alleges Microsoft misled millions over Microsoft 365 subscriptions

The Australian Competition and Consumer Commission announced that it has commenced proceedings in the Federal Court against Microsoft (MSFT) 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. The ACCC alleges that since October 31, 2024, Microsoft has told subscribers of Microsoft 365 Personal and Family plans with auto-renewal enabled that to maintain their subscription they must accept the integration of Copilot and pay higher prices for their plan, or, alternatively, cancel their subscription. The ACCC alleges this information provided to subscribers was false or misleading because there was an undisclosed third option, the Microsoft 365 Personal or Family Classic plans, which allowed subscribers to retain the features of their existing plan, without Copilot, at the previous lower price. “Following a detailed investigation, we will allege in Court that 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 ACCC is seeking orders including penalties, injunctions, declarations, consumer redress, and costs.