ACCC takes Microsoft to court for misleading 2.7m Microsoft 365 subscribers
Make us a preferred source
Make us a preferred source on Google
The news: The Australian Competition and Consumer Commission (ACCC) has commenced Federal Court proceedings against Microsoft Australia for allegedly misleading 2.7 million Australian customers regarding the price of their Microsoft 365 subscription following the integration of AI assistant Microsoft Copilot.
The context: The consumer watchdog alleges that since 31 October 2024, Microsoft told subscribers of the 365 Personal and family plans with auto-renewal enabled that they had to accept a higher price because of the Copilot integration or cancel their subscription.
With the integration, the annual subscription for the Microsoft 365 Personal plan increased by 45% from $109 to $159 while the annual subscription price for the Microsoft 365 Family plan increased by 29% from $139 to $179.
However, there existed an undisclosed third option to retain the Microsoft 365 Personal or Family Classic plans at the previous lower price without Copilot. The third option would only appear after a customer had begun the process of cancelling their subscription.
The ACCC’s investigation “drew on a significant number of consumer reports, as well as commentary in online forums such as Reddit”. It also flagged that information from consumers provided through the ACCC’s Infocentre was critical in alerting the regulator.
If found to have breached Australian Consumer Law, Microsoft could be liable for a maximum penalty of the greater of $50 million, three times the total benefits that have been obtained and are reasonably attributable, or if the total benefit cannot be determined then 30% of adjusted turnover during the breach turnover period.
What they said: “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 Microsoft Office apps included in 365 subscriptions are essential in many people’s lives and given there are limited substitutes to the bundled package, cancelling the subscription is a decision many would not make lightly.”
The source: ACCC media release
