Australia’s competition regulator has filed a lawsuit against Microsoft, claiming the company misled millions of customers into paying more for its Microsoft 365 software after adding its AI tool, Copilot. The Australian Competition and Consumer Commission (ACCC) said Microsoft pushed users toward higher-priced plans without clearly showing that cheaper options still existed. Prices of the personal and family plans jumped by 45% and 29% respectively, after Copilot was added.
According to a report from Reuters, the ACCC alleges that around 2.7 million Australians were affected.
Microsoft 365 Price Hike Sparks Legal Trouble
The ACCC said Microsoft failed to properly tell customers that a cheaper “classic” Microsoft 365 plan was still available without Copilot.
Instead, users only found this option when they tried to cancel their subscriptions. The regulator said this design tricked customers into believing they had no other choice, which breaks Australian consumer law.
Microsoft reportedly sent emails and blog posts informing users about the price increase, but did not mention the lower-priced plan. The ACCC claims this lack of clear communication gave users a false impression about their options.
According toReuters, the ACCC said the cheaper plan was hidden during the renewal process.
ACCC Seeks Heavy Penalties From Microsoft
The regulator is asking for fines, refunds for users, and orders to stop Microsoft from doing the same again.
Under Australian law, a company can be fined up to A$50 million for each breach, or even more depending on how much it earned from the misleading conduct.
Microsoft said in a short statement that it is reviewing the ACCC’s complaint carefully. The court will decide what penalties apply after reviewing all the evidence.
The ACCC also said this case highlights how tech companies must be open and fair while changing prices or plans.
It added that clear communication is important, especially when millions of customers depend on digital tools like Microsoft 365 for daily work, study, and productivity.
