Microsoft Faces ACCC Lawsuit over Misleading AI Copilot Subscriptions in Australia
The Australian Competition and Consumer Commission (ACCC) has filed a lawsuit against Microsoft, accusing the tech giant of misleading customers into purchasing AI-powered subscription packages featuring its “Copilot” tool, Reuters reports.
Filed on Monday, the lawsuit alleges that since October 2024, Microsoft forced nearly 2.7 million customers to switch to higher-priced Microsoft 365 Personal and Family plans.
According to the ACCC, the introduction of Copilot led to a sharp price increase—annual fees for the Microsoft 365 Personal plan rose by 45 percent to AUD 159, while the Family plan went up 29 percent to AUD 179. However, Microsoft failed to clearly inform users that a cheaper “Classic” plan was still available—one that only became visible when customers began the cancellation process.
The commission claims that this practice violates consumer protection laws and amounts to withholding essential product information. The ACCC has sought penalties, compensation, and cost orders against Microsoft Australia and its parent company.
If found guilty, Microsoft could face fines of up to AUD 50 million for each breach of consumer law.
