Microsoft Apologizes and Offers Refunds to 2.7 Million Australian Customers Over Misleading AI Pricing

Microsoft apologizes over Copilot plan confusion

Microsoft Australia has apologized to users of its M365 suite after regulators accused it of steering them towards pricey bundles that include its Copilot AI service. As The Register reported in January, Microsoft contacted subscribers in six Asia-Pacific nations in an email to advise of imminent price rises for M365 bundles that include its Copilot AI service. The emails advised that users could avoid the price rise by signing up for a "Classic" version of M365, but no information about that package was available online. Your correspondent, who has a personal account for M365, tried to find info about Classic mode by re-subscribing to the service. I saw dialog boxes reading, "I don't want my subscription," and "I want to keep my benefits", but no info about a Classic version. That's a classic "dark pattern" - a deliberately confusing or complex process that vendors use to steer customers towards the things they want them to buy, instead of presenting a comprehensive menu of choices. Late last month, Australia's Competition and Consumer Commission (ACCC) commenced legal action against Microsoft, on grounds that information it provided customers "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." On Thursday, Microsoft issued apologies to subscribers in New Zealand and Australia, with a near-identical missive in which the software behemoth said, "In hindsight, we could have been clearer about the availability of a non-AI enabled offering with subscribers, not just to those who opted to cancel their subscription." In an email received by this correspondent, Microsoft said, "We recognise we could have been clearer in our communications about the full range of Microsoft 365 subscription options including the option to switch to Microsoft 365 Family Classic." The email and apology posts all state, "Our relationship with our customers is based on trust and transparency and we apologise for falling short of our standards." That apology may even be sincere, as Microsoft will refund the difference between the price of Copilot-enabled and Classic plans to customers who want to downgrade after allegedly being railroaded into upgrades they may not have wanted. Microsoft also sent its January price rise advice to subscribers in Malaysia, Singapore, Taiwan, and Thailand. We've asked if the company plans to issue apologies in those nations, too, but haven't received a response at the time of writing.

Microsoft to refund millions of customers over 365 subscription price increase for Copilot AI add-on

Almost three million Australians will be offered refunds after Microsoft apologised for the way it charged customers to access its artificial intelligence tools. Microsoft Australia emailed the offer to software subscribers on Thursday and admits the pricing structure and plans lacked clarity and fell short of its standards. The apology comes 10 days after the Australian Competition and Consumer Commission (ACCC) launched legal action against Microsoft Australia and its parent company in the federal court, claiming it had misled consumers about the price of their subscriptions and the availability of cheaper plans without AI tools. The US firm could face multimillion-dollar penalties if the court finds in the commission's favour. Microsoft Australia began sending messages to Microsoft 365 Personal and Family subscribers on Thursday morning, outlining available plans and apologising for a lack of clarity about them. The plans include $16 and $18 per month packages that include access to the company's AI assistant Copilot, and $11 and $14 "classic" subscriptions that do not include the tool. Microsoft said subscribers who opt to switch back to the cheaper plans before the end of 2025 would receive refunds dating back to payments made after 30 November 2024. "Our relationship is based on trust and transparency and we apologise for falling short of our standards," the email said. In its lawsuit, the commission alleges Microsoft misled about 2.7 million subscribers into paying higher prices to maintain their subscriptions with Copilot added and were not advised of a cheaper alternative. Only when subscribers sought to cancel their service were they told about a non-AI option, commission chair, Gina Cass-Gottlieb, said. "We're concerned that Microsoft's communications denied its customers the opportunity to make informed decisions about their subscription options," she said. In a statement, Microsoft Australia said the company should have done better. "In hindsight, we could have been clearer about the availability of a non-AI-enabled offering with subscribers, not just to those who opted to cancel their subscription," the statement said. "In our email to subscribers, we expressed our regret for not being clearer about our subscription options, shared details about lower priced alternatives that come without AI, and offered a refund to eligible subscribers who wish to switch." While customer refunds could cost the company millions of dollars, Microsoft could also face large fines if the watchdog pursues and is successful in its lawsuit. Maximum penalties for corporations found guilty of anti-competitive practices include a $50m fine, three times the value of the misleading act, or 30% of the company's adjusted turnover during the breach.

Microsoft Apologizes to Australian 365 Users on AI Pricing, Offers Refund - Decrypt

Microsoft has issued a formal apology to its 2.7 million Australian subscribers and offered refunds following a legal action against the tech giant alleging it deliberately concealed cheaper subscription alternatives when bundling AI features with steep price increases. The apology, delivered Thursday via email to affected customers, comes 10 days after the Australian Competition and Consumer Commission filed legal proceedings against Microsoft over the integration of its Copilot AI assistant into Microsoft 365 Personal and Family plans last October. Microsoft confirmed to subscribers that it introduced AI capabilities into Microsoft 365 Personal and Family subscriptions in response to demand for advanced AI tools, but acknowledged in its statement that it "could have been clearer about the availability of a non-AI-enabled offering with subscribers." "Our relationship with our customers is based on trust and transparency, and we apologise for falling short of our standards," Microsoft wrote in the email to subscribers. The tech giant has outlined two options for subscribers in its statement: stay on the current AI-enabled plan at $10-$12 (AU$16-$18) monthly, or switch to Microsoft 365 Classic at $7-$9 (AU$11-$14) monthly without Copilot. Customers switching to the Classic plan by the end of the year will receive refunds for the price difference dating back to their first renewal after November 30, 2024, the company said. The ACCC had claimed in its filing that Microsoft deliberately omitted mention of its cheaper "Classic" plans that retained original features without Copilot at previous prices, and is seeking penalties, injunctions, declarations, consumer redress, and costs from the company. "Companies should explicitly separate AI and non-AI pricing tiers at launch, as well as state the pros and cons of each to allow consumers to make more informed decisions," Joni Pirovich, Founder and CEO of agentic operating system Crystal aOS, told Decrypt. "Price should not be an arbitrarily discriminating factor to AI adoption that could truly benefit consumers," she added. Australian subscribers who wish to remain on Microsoft 365 Personal or Family with AI features don't need to take any action, the company wrote. At the same time, those switching to the Classic plan must keep recurring billing enabled to maintain access. "We have been present in Australia for more than 40 years, operating on the principles of trust and transparency," the company said. "We will learn from this and improve."

Microsoft offers refunds after tricking customers into AI upgrades

Gift 5 articles to anyone you choose each month when you subscribe. Microsoft will issue millions of dollars in refunds after the consumer watchdog alleged it tricked 2.7 million Australians into paying for more expensive software plans featuring its artificial intelligence Copilot chatbot, even if they did not want it. The $US3.8 trillion technology giant wrote to customers on Thursday to apologise to those affected and admitted it should have been more transparent about the existence of a cheaper plan, for those who did not think its artificial intelligence features were worth paying more for.

Microsoft apologizes to 2.7 million customers, offers refunds over misleading Microsoft 365 subscription pricing: Check how to claim

Microsoft has issued an apology to approximately 2.7 million Australian customers following allegations by the Australian Competition and Consumer Commission (ACCC) that the tech giant misled subscribers over pricing and subscription options for its Microsoft 365 plans integrated with artificial intelligence (AI) features. The ACCC launched legal proceedings in the Federal Court accusing Microsoft of deceptive practices related to the rollout of its AI assistant Copilot and substantial subscription price increases. The ACCC's case centers on claims that since October 31, 2024, Microsoft told customers with auto-renewing Microsoft 365 Personal and Family subscriptions that they had to accept the AI-enhanced plans at significantly increased prices or cancel their subscriptions. The Personal plan's annual fee jumped 45% from AUD 109 to AUD 159, while the Family plan's price went up 29% from AUD 139 to AUD 179 after introducing Copilot. However, the ACCC alleges Microsoft failed to disclose the existence of "Classic" plans allowing subscribers to maintain their original features without Copilot at the lower prices, an option only revealed deep into the cancellation process -- not proactively communicated to customers. According to ACCC, Microsoft's communication, including two emails and a blog post, was misleading because it conveyed that consumers' only choices were to either accept the higher-priced plans with AI features or cancel. The omission of the Classic plans deprived consumers of informed decision-making, breaching Australian consumer law. The ACCC's investigation drew on numerous consumer complaints, highlighting widespread confusion and economic harm suffered by many subscribers. Refunds will cover the price difference dating back to the customer's first renewal after November 30, 2024. Microsoft will process refunds within 30 days of the plan switch and return the funds to the original payment method. The refund will be reflected in the customer's Microsoft account once processed. Subscribers will be receiving direct communication from Microsoft explaining their options. To claim a refund, customers should: For those wishing to cancel or change plans manually, Microsoft advises visiting their account services page and signing in with the Microsoft account used for the subscription. Detailed cancellation and refund instructions are available on the official Microsoft support site. In response to the ACCC's action, Microsoft Australia has apologized for falling short of consumer expectations and committed to working collaboratively with the regulator to resolve the matter. "In response to the demand for advanced AI tools, we introduced AI capabilities into the Microsoft 365 personal and family subscriptions that we offer in Australia," the company said. "In hindsight, we could have been clearer about the availability of a non-AI enabled offering with subscribers, not just to those who opted to cancel their subscription. "In our email to subscribers, we expressed our regret for not being clearer about our subscription options, shared details about lower-priced alternatives that come without AI and offered a refund to eligible subscribers who wish to switch," reported news.com.au. The company announced plans to offer refunds to affected customers who were automatically renewed into more expensive AI-inclusive subscriptions under unclear terms. Microsoft stressed its intent to improve transparency and communication practices moving forward. The ACCC seeks a range of orders including financial penalties, injunctions, declarations, consumer redress, and legal costs, signifying a strong regulatory stance on tech companies' accountability when introducing pricing changes linked to new product features.

Microsoft offers refunds to millions of Aussies it misled through deceptive pricing

Microsoft has offered to refund the millions of Australians it misled into paying higher prices for its artificial intelligence product Copilot through deceptive marketing. The Australian Competition and Consumer Commission last month took the local arm of the US$3.8 trillion tech giant to court for failing to properly communicate its subscription options and prices for Microsoft 365. The company had told users to accept the integration of Copilot and pay a 45 per cent mark up or cancel their subscription. Users could continue using the original plan if they went to cancel their subscription and find an option to stay on their plan without the AI product. Microsoft sent an email to users apologising for the deceptive tactic and said it will refund impacted customers who wish to switch back to the classic plan. "If you switch to Microsoft 365 [Personal/Family] Classic by 31 December 2025, we'll refund the difference in price between plans, starting from your first renewal date after 30 November 2024," an email from Microsoft to its Australian customers read. It acknowledged the deceptive communication it used when alerting customers about the new plan. "We could have been clearer in our communications about the full range of Microsoft 365 subscription options including the option to switch to Microsoft 365 [Personal/Family] Classic," the email read. Microsoft 365 includes popular products such as Word, PowerPoint and Excel and the tech giant was looking to integrate its AI tools in the service. Despite issuing an apology and offering refunds, Microsoft may still have to pay a penalty depending on the ACCC's court actions. It remains unclear how large the potential fine will be. The largest fine a company has been forced to pay after action from the ACCC was the $100 million penalty issued to Qantas last year. The consumer watchdog's chair Gina Cass-Gottlieb said Microsoft's original communications were misleading because they conveyed to customers that their options were either to accept the new plan with a higher price or cancel their subscription. "All businesses need to provide accurate information about their services and prices. Failure to do so risks breaching the Australian Consumer Law," she said. It comes as the company invests massively in building data centres for its AI and cloud computing businesses. The tech giant has spent USD$88 billion in its 2025 fiscal year on capital expenditure, and forecasts spending another US$30 billion through the last quarter of 2025 as it develops Copilot.