Microsoft Faces Major Lawsuit in Australia Over Alleged Deceptive Copilot AI Subscription Practices

Microsoft sued for allegedly tricking millions into Copilot M365 subscriptions

The Australian Competition and Consumer Commission (ACCC) is suing Microsoft for allegedly misleading 2.7 million Australians into paying for the Copilot AI assistant in the Microsoft 365 service. Even though subscribers could have stayed on their existing plan without Copilot and at the same price, the ACCC says that Microsoft concealed that option and designed its communications to make users think that upgrading to the more expensive, AI‑integrated tier was the only way to keep their service active. The legal action was taken after an investigation from the ACCC prompted by multiple complaints about Microsoft's deceptive practices. Microsoft 365 (formerly Office 365) is a subscription-based productivity suite offering access to Microsoft Office apps and cloud tools such as OneDrive, Teams, and SharePoint. On October 31, 2024, Microsoft completed the integration of the Copilot AI tool into the Microsoft 365 service for Australian customers (global rollout continued through early 2025), providing AI assistance across apps such as drafting text, summarizing reports, and generating explanations through chats. From that date onward, existing Microsoft 365 subscribers who reached their renewal date or opted for auto-renewal, received messages from Microsoft that did not inform they could continue with their existing tier, without Copilot. Customers would only see that option if they went through the service cancellation process, which ACCC comments isn't something most people interested in continuing to use Microsoft 365 would do in the first place. As a result, subscribers of the Microsoft 365 Personal tier faced a 45% price increase for Copilot, while those on the Microsoft 365 Family plan saw an increase of 29%. ACCC sees Microsoft's practices as a breach of several sections of the Australian Consumer Law. According to the legal document, misleading millions of Microsoft 365 subscribers about their renewal options after Copilot was added to the service violates the following ACL sections: The ACCC now seeks from the Federal Court of Australia in New South Wales to impose civil penalties on Microsoft, issue injunctions to prevent similar conduct in the future, and order consumer compensation for affected subscribers. Considering that Microsoft's approach in communicating Copilot's launch on the Microsoft 365 platform was similar worldwide, similar legal actions might be expected in other regions, too. BleepingComputer has contacted Microsoft to request a statement on ACCC's lawsuit, and a spokesperson responded with the following comment: "Consumer trust and transparency are top priorities for Microsoft, and we are reviewing the ACCC's claim in detail. We remain committed to working constructively with the regulator and ensuring our practices meet all legal and ethical standards."

Microsoft is being sued with the claim that it "deliberately hid" cheaper Microsoft 365 plans

* ACCC sues Microsoft, alleging it hid a cheaper 'Classic' Microsoft 365 plan to push pricier Copilot plans * The 'Classic' option matched old pricing but was shown only during the cancellation flow, ACCC says * Microsoft says it values transparency and will cooperate; courts will decide if the action was misleading The productivity world got a nasty shock when Microsoft announced it would raise the monthly cost of Microsoft 365, especially given that it had cost the exact same for years before. And while some people didn't take the price hike so well, others discovered proof that Microsoft may have deliberately hidden the option to continue paying the old price for Microsoft 365 without any AI features. Now, the company is in hot water in the Land Down Under, as the Australian Competition and Consumer Commission (ACCC) has sued Microsoft, accusing it of misleading consumers. The ACCC sues Microsoft, claiming that it "deliberately hid" cheaper Microsoft 365 plans An initial report of the situation came to us via ABC News Australia (thanks for the spot, Neowin!), which detailed what's happening with the ACCC and Microsoft. Here's what happened: when Microsoft sent out an email saying its Microsoft 365 prices were going up, the ACCC claims Microsoft seemingly gave people only two choices. They could either pay the higher price or cancel their subscription. However, the ACCC then claims there was a third option: someone could continue at the price they're currently paying under a "Classic" plan that doesn't contain the additional AI tools. The ACCC says that the only way a consumer would know this plan even exists is if they went through the process of canceling their subscription. As part of the cancellation process, Microsoft shows a few payment plans that consumers can change to instead of cancelling, including the "Classic" plan mentioned above. It's priced the same as the old subscription, and says it won't feature the Copilot features that caused the price hike in the first place. After over 100 Australians wrote to Gina Cass-Gottlieb, the chair of ACCC, to complain about this behavior, Gina decided to take the fight to Microsoft with a statement: "Following a detailed investigation, the ACCC alleges that Microsoft deliberately hid this third option, to retain the old plan at the old price, in order to increase the uptake of Copilot and the increased revenue from the Copilot integrated plans. [...] We see this as affecting a very significant number of Australian consumers, as being the action by a very major corporation," Microsoft got in contact with ABC News Australia with its own statement: "Consumer trust and transparency are top priorities for Microsoft. We remain committed to working constructively with the regulator and ensuring our practices meet all legal and ethical standards." We'll have to wait and see how this battle shakes out; will Microsoft convince the courts that it was being transparent enough, or will the company have to advertise its Classic plans better in the future?

Australia sues Microsoft over forced Copilot integration in Microsoft 365

Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. Editor's take: Microsoft 365 (previously Office 365) has provided Redmond with a steady stream of cloud-based revenue since 2010. Like other major technology companies, Microsoft is now attempting to leverage the service's popularity to push its AI chatbot on users. Australian authorities have indicated that this practice may be illegal. The Australian Competition & Consumer Commission (ACCC) is taking Microsoft to the country's federal court. The agency is suing Microsoft Australia and Microsoft Corporation, alleging that the company misled approximately 2.7 million Australian customers over subscription price changes and alternative renewal options. The dispute dates back to October 31, 2024, when Microsoft notified its subscribers that the Microsoft 365 Personal and Family plans would integrate the Copilot chatbot. To continue using the cloud service, customers had to accept the integration and pay a higher price; otherwise, they were asked to cancel their subscription. The ACCC has described this forced choice as misleading or deceptive, noting that customers actually had a third, previously undisclosed option: the Microsoft 365 Personal or Family Classic plans. These plans retained all the features of the original subscriptions, were significantly cheaper, and did not include Copilot integration. Microsoft made no explicit reference to the "Classic" plans without Copilot, the ACCC said, and only offered them to customers who were about to cancel their Microsoft 365 subscriptions. The Australian regulator provided a damning screenshot showing Microsoft's behavior and is now accusing the company of deliberately hiding the Classic plans to promote Copilot integration. "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 ACCC said. The organization collected a significant number of complaints and consumer reports, as well as user comments from online forums such as Reddit. The ACCC is now seeking punitive measures against Microsoft, which could include penalties, injunctions, or other undisclosed costs. In a worst-case scenario, Microsoft could be required to pay up to 30 percent of the revenue collected during the alleged unlawful conduct. After being hit with the ACCC lawsuit, Microsoft stated that consumer trust and transparency remain its top priorities. The company emphasized its constructive engagement with regulatory agencies, despite ongoing scrutiny from antitrust authorities worldwide. Copilot is now an integral part of every Microsoft 365 installation, except for customers in the European Union.

Microsoft sued for allegedly misleading millions of Australians with its AI pricing

When Microsoft told customers it was jacking up the price by 45% for its office suite, it gave them two options: accept the price for the product - and it's AI add-ons - or cancel. According to Australia's consumer watchdog, the tech giant allegedly failed to share that a third option was available - pay the same lower price and opt out of the AI, named Copilot, in Microsoft 365. The Australian Competition and Consumer Commission (ACCC) has taken Microsoft to federal court on Monday alleging the company misled approximately 2.7 million Australian personal and family plan customers by failing to disclose the third option when the Microsoft 365 plans had Copilot included from 31 October 2024. The ACCC has alleged communications with customers only presented two options: paying the higher price or cancelling the plan. The regulator alleged this information was false or misleading as there was an undisclosed third option of "classic" plans which allowed subscribers to retain the features of existing plans without Copilot at the previous lower price. Consumers were only presented this option when subscribers began cancelling their subscription, the ACCC has alleged. The annual subscription price of the Microsoft 365 personal plan increased by 45% from $109 to $159 with Copilot included. The annual subscription price for the Microsoft 365 family plan increased by 29% from $139 to $179. Microsoft sent two emails and published a blog post to inform auto-renewing subscribers about the Copilot integration and pending price increase. "We allege that Microsoft's two emails to existing subscribers and the blog post were false or misleading as they conveyed that consumers had to accept the more expensive Copilot-integrated plans, and that the only other option was to cancel, the ACCC chair, Gina Cass-Gottlieb, said. "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." Cass-Gottlieb said the office apps included in 365 subscriptions are essential in many people's lives, and given there are limited substitutes to the bundled package, cancelling may not have been an option people would take lightly but customers may have opted for the classic plan if they had been aware of all the viable options. The ACCC's investigation drew on a significant number of consumer reports as well as online commentary from sites including Reddit, the regulator said. The ACCC is seeking orders including penalties, injunctions, declarations, consumer redress and costs. The maximum penalty would be the greater of $50m, three times the total benefits that have been obtained and are reasonably attributable, or 30% of the corporation's adjusted turnover during the breach turnover period, if total benefits cannot be determined. "Consumer trust and transparency are top priorities for Microsoft, and we are reviewing the ACCC's claim in detail," a Microsoft spokesperson said. "We remain committed to working constructively with the regulator and ensuring our practices meet all legal and ethical standards."

Australia sues Microsoft over 'misleading' AI offer

Australia's competition watchdog accused Microsoft on Monday of misleading people into paying for its AI assistant Copilot. The authority said it had filed a suit in the Federal Court against Microsoft Australia and its parent Microsoft Corp. The software giant is accused of making "false or misleading" statements to around 2.7 million Australians who subscribe by auto-renewal to Microsoft 365 plans, which include a suite of online Office services. Microsoft allegedly told customers that they had two options: either pay extra for Microsoft 365 services integrated with Copilot, or cancel their subscriptions altogether. But there was a partly hidden third option -- visible only when people started to cancel -- of sticking to existing "Classic" plans without Copilot for the original price, the Australian Competition and Consumer Commission said in a statement. "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," commission 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, canceling the subscription is a decision many would not make lightly." The commission accused Microsoft of misleading subscribers on personal and family plans since October 31, 2024. Annual subscriptions for Microsoft 365 plans incorporating Copilot were between 29% and 45% higher than those without, the watchdog said. The commission is seeking penalties, injunctions, consumer redress, and costs. Microsoft could face penalties of Aus$50 million or more (US$30 million) for each breach. Microsoft did not immediately respond to AFP's request for comment.

Microsoft Sued in Australia Over 365 Price Hikes Tied to AI Copilot Rollout - Decrypt

The investigation was triggered by Reddit posts, consumer complaints, and tips revealing the hidden option. Australia's competition regulator is suing Microsoft, alleging the software giant deliberately misled 2.7 million customers about cheaper subscription alternatives when it forced its AI assistant, Copilot, into Microsoft 365 plans alongside steep price increases. The Australian Competition and Consumer Commission filed proceedings on Sunday against Microsoft Australia and its U.S. parent corporation, alleging the company provided subscribers with false information about their options after integrating Copilot into personal and family plans on October 31 last year. Microsoft reportedly told auto-renewing subscribers they had two choices: accept Copilot integration with higher prices, or cancel their subscription entirely, according to the ACCC. The regulator alleges this was misleading because a third option existed, Microsoft 365 Personal and Family "Classic" plans that retained all original features without Copilot at the previous lower prices. The only way customers could discover these alternatives was by navigating to their account's subscription section, selecting "Cancel subscription," the regulator said, and proceeding through the cancellation flow until reaching a page that finally revealed the Classic plan option. "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 in a statement. Microsoft did not immediately respond to Decrypt's request for comment. "With this sort of behavior, Microsoft risks its social contract with users regardless of the legal outcome," Joni Pirovich, CEO and founder of Crystal aOS, told Decrypt. "An interesting avenue the ACCC could pursue in discovery is to ask for the reasons for Microsoft approving the rollout without disclosing the Classic option." The ACCC said consumer complaints and online discussions on Reddit that revealed the hidden Classic option, along with tips to its Infocentre, played a crucial role in prompting the investigation. The watchdog is seeking orders including penalties, injunctions, declarations, consumer redress, and costs. "Ideally, companies must present all material options prominently so consumers can make informed choices without hidden steps," Even Alex Chandra, a partner at IGNOS Law Alliance, told Decrypt. "Simply making an option technically available (e.g., buried in account settings or cancellation flows) is usually insufficient," and that companies must educate users about their choices," he added. Microsoft also faces a U.S. class-action lawsuit this month, where eleven ChatGPT Plus subscribers allege the company choked OpenAI's compute supply through an exclusive 2019 Azure agreement, artificially inflating ChatGPT prices while building competing AI products.

Australia sues Microsoft over 'misleading' AI offer

Sydney (AFP) - Australia's competition watchdog accused Microsoft on Monday of misleading people into paying for its AI assistant Copilot. The authority said it had filed a suit in the Federal Court against Microsoft Australia and its parent Microsoft Corp. The software giant is accused of making "false or misleading" statements to around 2.7 million Australians who subscribe by auto-renewal to Microsoft 365 plans, which include a suite of online Office services. Microsoft allegedly told customers that they had two options: either pay extra for Microsoft 365 services integrated with Copilot, or cancel their subscriptions altogether. But there was a partly hidden third option -- visible only when people started to cancel -- of sticking to existing "Classic" plans without Copilot for the original price, the Australian Competition and Consumer Commission said in a statement. "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," commission 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 commission accused Microsoft of misleading subscribers on personal and family plans since October 31, 2024. Annual subscriptions for Microsoft 365 plans incorporating Copilot were between 29 and 45 percent higher than those without, the watchdog said. The commission is seeking penalties, injunctions, consumer redress, and costs. Microsoft could face penalties of Aus$50 million or more (US$30 million) for each breach. Microsoft did not immediately respond to AFP's request for comment.

Australian regulator sues Microsoft over Microsoft 365 Copilot pricing notifications - SiliconANGLE

Australian regulator sues Microsoft over Microsoft 365 Copilot pricing notifications Australia's competition watchdog has sued Microsoft Corp. over the way the company rolled out artificial intelligence features to its productivity suite. The Australian Competition and Consumer Commission, or ACCC, filed the complaint today. The lawsuit focuses on the Personal and Family editions of Microsoft 365. The two plans include the Office application bundle and certain other services such as Microsoft Teams, but lack the administrative controls available in the business versions. Consumers can configure their subscriptions to renew automatically. The ACCC alleges that Microsoft misled 2.7 million Australian consumers who have automatically renewing Microsoft 365 Personal and Family subscriptions. Last year, the company rolled out its Copilot AI assistant to the two plans and raised their prices. The ACC says that Microsoft didn't inform consumers they could avoid the price hike by switching to plans without Copilot. "We're concerned that Microsoft's communications denied its customers the opportunity to make informed decisions about their subscription options, which included the possibility of retaining all the features of their existing plan without Copilot and at the lower price," said ACCC chair Gina Cass-Gottlieb. After it released Copilot to Microsoft 365, the company raised the price of the Personal and Family plans by 45% and 29% respectively. It subsequently sent customers an email informing them of the change. The message stated that it's possible to "cancel any time to stop future charges or change how you pay by managing your subscription in your Microsoft account." According to ACCC, the email wasn't transparent enough about the fact that users could continue using Microsoft 365 without paying more. The watchdog raised the same issue in connection with a different email Microsoft sent to consumers and an accompanying blog post. Microsoft 365's subscription switching workflow is another focus of the lawsuit. The company offers Classic versions of the Microsoft 365 Personal and Family plans that don't include Copilot and cost less than the standard subscriptions. According to the ACCC, consumers could only access the Classic versions by starting the subscription cancellation process. That involved navigating to Microsoft's account management portal and clicking a "Cancel subscription" button. If the company is found to have breached competition laws, it could be fined up to 30% of the adjusted turnover it generated during the relevant time period. The court could also order Microsoft to change its business practices. "Consumer trust and transparency are top priorities for Microsoft, and we are reviewing the ACCC's claim in detail," Microsoft said in a statement. "We remain committed to working constructively with the regulator and ensuring our practices meet all legal and ethical standards."

Australian government sues Microsoft for 'deliberately' hiding Copilot-free Microsoft 365 plans

TL;DR: The Australian Competition and Consumer Commission (ACCC) is suing Microsoft for allegedly misleading 2.7 million Australians by hiding a lower-priced Microsoft 365 subscription option without Copilot AI after a price increase. The ACCC seeks penalties for denying consumers informed subscription choices. Microsoft is reviewing the claim. The Australian Competition and Consumer Commission, or ACCC, is an independent government body that monitors fair trading and robust consumer protection laws in Australia. The body's latest target is Microsoft, which it is suing for allegedly misleading 2.7 million Australian consumers over its Microsoft 365 subscriptions. It all boils down to recent price increases for Microsoft 365 plans, which cover the Microsoft Office suite, cloud storage, and more. Basically, Microsoft increased the subscription price for Microsoft 365 after integrating its Copilot AI tools and services. The only problem, from the ACCC's perspective, is that the company "deliberately hid" the fact that subscribers could have kept the old price if they didn't want Copilot. According to the ACCC's investigation, once Microsoft increased prices on October 31, 2024, customers were notified that their auto-renewal would include the higher Microsoft 365 pricing, with the only other option being to cancel the service. However, once the cancellation process began, customers were informed about a hidden "classic" Copilot-free plan at the previous price point. This setup covered both personal and family Microsoft 365 plans. "Following a detailed investigation, the ACCC alleges that Microsoft deliberately hid this third option, to retain the old plan at the old price, in order to increase the uptake of Copilot and the increased revenue from the Copilot integrated plans," ACCC 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, which included the possibility of retaining all the features of their existing plan without Copilot and at the lower price," Gina Cass-Gottlieb added. Even though the cost of the new Copilot-ready Microsoft 365 plans increased by up to 40% for personal users and 29% for families, the ACCC isn't suing Microsoft for pricing. It's related to Microsoft not disclosing all options to its customers, and for that, it's treating the issue very seriously and will seek a significant penalty. In fact, the ACCC will reportedly be seeking "penalties, injunctions, declarations, consumer redress and costs" in the Federal Court of Australia. In response, a Microsoft spokesperson told ABC News Australia that "Consumer trust and transparency are top priorities for Microsoft," and that it is currently reviewing the claim.

ACCC alleges Microsoft misled users into price hikes for AI assistant

Gift 5 articles to anyone you choose each month when you subscribe. Microsoft misled millions of customers into paying more for its artificial intelligence assistant known as Copilot when they did not have to, the competition watchdog alleges. In filings with the Federal Court, the Australian Competition and Consumer Commission alleges the global software giant has made false or misleading statements to about 2.7 million Australians since October last year when it increased the cost of a personal subscription to its office suite by 45 per cent and a family plan by almost 30 per cent. The regulator will seek penalties which could include fines and repayments.

Microsoft Hit With Lawsuit in Australia Over Copilot AI Plan Pricing

The company allegedly did not tell users about a cheaper non-AI plan Microsoft is facing a lawsuit in Australia for allegedly misleading its Microsoft 365 subscribers in the country. The lawsuit has been brought forth by the Australian Competition and Consumer Commission (ACCC) against the Windows maker for allegedly failing to inform subscribers about a cheaper alternative while hiking the price of the subscription plans after integrating Copilot with the service. The Redmond-based tech giant introduced the price hike in the country on October 31, 2024, informing subscribers to either pay the higher prices or cancel their subscription. Australia Sues Microsoft Over Misleading Subscribers In a press release, the ACCC announced that it has commenced proceedings in the Federal Court against Microsoft Australia and its parent company, Microsoft Corp. The crux of the lawsuit is the price hike of the Microsoft 365 Personal and Family plans. After integrating its AI chatbot with the service, which is now dubbed Microsoft 365 Copilot, the company increased the price of the Personal plan by 45 percent from AUD 109 (roughly Rs. 6,300) to AUD 159 (roughly Rs. 9,200). The Family plan's price was also hiked by 29 percent to AUD 179 (roughly Rs. 10,300). The main allegation against the company is that while informing the existing subscribers, which is estimated to be 2.7 million in the country, via two emails and a blog post, it told them to either accept the higher prices or cancel their subscription. This is being called misleading, as the tech giant did not inform them about a third option, which was to retain the subscription at the same price without any AI features. "We allege that Microsoft's two emails to existing subscribers and the blog post were false or misleading as they conveyed that consumers had to accept the more expensive Copilot-integrated plans, and that the only other option was to cancel," Gina Cass-Gottlieb, Chair of the ACCC, said, adding, "All businesses need to provide accurate information about their services and prices. Failure to do so risks breaching the Australian Consumer Law." The ACCC highlighted that the maximum penalty that can be imposed on a company for each breach of the Australian Consumer Law is the greater of AUD 50 million (roughly Rs. 289 crore), three times the total benefits obtained by the company that were reasonably attributed, or 30 percent of its adjusted turnover during the period of the breach.

Australia sues Microsoft over 'misleading' AI offer

Australia's competition watchdog accused Microsoft on Monday of misleading people into paying for its AI assistant Copilot. But there was a partly hidden third option -- visible only when people started to cancel -- of sticking to existing "Classic" plans without Copilot for the original price, the Australian Competition and Consumer Commission said in a statement. Australia's competition watchdog accused Microsoft on Monday of misleading people into paying for its AI assistant Copilot. The authority said it had filed a suit in the Federal Court against Microsoft Australia and its parent Microsoft Corp. The software giant is accused of making "false or misleading" statements to around 2.7 million Australians who subscribe by auto-renewal to Microsoft 365 plans, which include a suite of online Office services. Microsoft allegedly told customers that they had two options: either pay extra for Microsoft 365 services integrated with Copilot, or cancel their subscriptions altogether. But there was a partly hidden third option -- visible only when people started to cancel -- of sticking to existing "Classic" plans without Copilot for the original price, the Australian Competition and Consumer Commission said in a statement. "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," commission 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 commission accused Microsoft of misleading subscribers on personal and family plans since October 31, 2024. Annual subscriptions for Microsoft 365 plans incorporating Copilot were between 29 and 45 percent higher than those without, the watchdog said. The commission is seeking penalties, injunctions, consumer redress, and costs. Microsoft could face penalties of Aus$50 million or more (US$30 million) for each breach. Microsoft did not immediately respond to AFP's request for comment.

Microsoft Under Fire In Australia After Watchdog Says Tech Giant Misled 2.7 Million Users Into Paying Higher Fees After AI Copilot Integration - Microsoft (NASDAQ:MSFT)

Australia's competition watchdog has taken Microsoft Corp. (NASDAQ:MSFT) to court, alleging the company misled millions of customers into paying more for its Microsoft 365 subscriptions after bundling them with its artificial intelligence tool, Copilot. Regulator Alleges Microsoft Misled Consumers On Monday, the Australian Competition and Consumer Commission filed a lawsuit accusing Microsoft of deceptive conduct that affected about 2.7 million users, reported Reuters. The regulator claims that beginning in October 2024, Microsoft gave customers the impression they had to upgrade to higher-priced Microsoft 365 personal and family plans that included Copilot. The ACCC said Microsoft failed to make it clear that a cheaper "classic" plan without Copilot was still available for users. A Microsoft spokesperson told the publication that the company is reviewing the ACCC's claim in detail. Microsoft did not immediately respond to Benzinga's request for comments. See Also: Elizabeth Warren Says Trump 'Approved' The Largest Meat Company In World To Be Listed On NYSE Ignoring Corruption And Bribery History, Demands Answers AI-Driven Price Hikes Spark Legal Challenge Following the integration of Copilot, the annual price of Microsoft 365 personal plans rose 45% to A$159 ($103.32), while family plans increased 29% to A$179, the regulator stated. The ACCC said it is seeking penalties, consumer redress, injunctions, and costs against Microsoft Australia Pty Ltd and its U.S. parent company. If found guilty, Microsoft could face fines of up to A$50 million per breach or 30% of its adjusted turnover during the violation period, the report said. Microsoft's AI Momentum Faces Scrutiny The lawsuit comes as Microsoft surged 25.09% year-to-date -- outpacing the S&P 500's 15.73% gain during the same period, according to Benzinga Pro. Last week, it was also revealed that CEO Satya Nadella's annual compensation has climbed 22% to $96.5 million, a feat closely linked to the tech giant's stock performance. In July, Microsoft posted quarterly earnings and revenue that exceeded expectations, with sales climbing 18% -- its fastest growth in more than three years. The company is scheduled to report its next earnings on Oct. 29. Benzinga's Edge Stock Rankings position MSFT in the 97th percentile for Growth, highlighting its strong long-term fundamentals and high investor confidence. Click here to see how it stacks up against its peers. Read Next: After Google's $2.7B Acquisition Of Founders And Staff, This AI Startup Abandons Large Language Model Plans And Shifts Focus Away From Chatbots Photo Courtesy: Tada Images on Shutterstock.com Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors. MSFTMicrosoft Corp$524.290.72%OverviewMarket News and Data brought to you by Benzinga APIs

Microsoft Faces Lawsuit In Australia For Misleading Consumers

The Australian Competition & Consumer Commission (ACCC) has launched court proceedings against Microsoft Corporation and its Australian subsidiary, alleging that the tech giant misled roughly 2.7 million Australian subscribers of its Microsoft 365 "Personal" and "Family" plans. According to the regulator, Microsoft told customers they needed to accept a higher price tied to the integration of its AI assistant Copilot or cancel their subscription. However, the ACCC contends there was a third, lower-cost "Classic" plan without the AI feature, which was not clearly communicated to consumers. Importantly, the allegations centre on transparency and consumer choice. In essence, the watchdog asserts that Microsoft's communications gave a false impression of limited options, thereby steering many users toward more expensive plans. Moreover, the price increases were substantial: for example, the "Personal" plan reportedly rose by 45%. Moreover, the ACCC notes that in terms of penalties for corporations, the maximum penalty for each breach of the Australian Consumer Law is the greater of: The ACCC has alleged that Microsoft misled millions of Australians over changes to its Microsoft 365 Personal and Family subscriptions. For context, on October 31, 2024, the company introduced its AI assistant, Copilot, across Microsoft 365 products and announced price increases. Furthermore, in a blog post published that day, Microsoft told users that subscription fees would rise upon renewal, linking the hike to new AI-powered features of Copilot. The ACCC alleges this communication gave consumers the impression that they had only two options: accept the price increase with Copilot or cancel their subscription. Subsequently, on January 9, 2025, Microsoft emailed subscribers notifying them that their annual Personal plan would rise from AU$ 109 to AU$ 159 starting April 19, 2025. A second email on April 13, a week before renewal, reiterated that unless the user cancelled by the 17th, the new price would automatically apply for the Personal plan. Consequently, Microsoft renewed subscriptions at the higher rate on April 19. Interestingly, the ACCC alleges that Microsoft failed to mention the hidden third alternative: a "Classic" plan that allowed subscribers to retain their existing service without Copilot and continue paying the old subscription rate. The ACCC states that Microsoft revealed the Classic option only after users began the cancellation process, hiding it within the online cancellation flow. As a result, consumers reasonably believed their only choices were to pay more or lose access. Notably, the Personal plan price rose by 45%, and the Family plan by 29%. The ACCC's evidence includes Microsoft's blog post, the two subscriber emails, and consumer reports, including online forum discussions on Reddit. As it stands, Microsoft is confronting a number of antitrust lawsuits globally. Most recently, on October 13, a US federal class-action lawsuit was filed in California alleging Microsoft used its exclusive compute partnership with OpenAI to monopolise the generative AI market. The core claim is that Microsoft restricted the supply of compute resources to OpenAI's models, thereby inflating subscriptions for ChatGPT and stifling competition. The tech giant is also facing a US Federal Trade Commission (FTC) probe over AI and licensing practices. Elsewhere, the Competition Commission of India (CCI) is currently reviewing whether Microsoft Corporation and Google have contravened competition law through bundling AI-enhanced features with their respective office software packages in India. The investigation centres on possible breaches of Sections 3(4) and 4 of the Competition Act, 2002, which address anti-competitive agreements and abuse of dominance. For context, Google expanded generative AI tools such as Gemini, NotebookLM, and AI enhancements across Gmail, Docs, and Meet on its Workspace platform in January 2025. Meanwhile, Microsoft introduced its Copilot AI assistant to Word, Excel, PowerPoint, Outlook, Teams, and other Microsoft 365 applications in March 2023. Additionally, in the European Union (EU), Microsoft offered to sell its Microsoft Office 365 and Microsoft 365 software suites without the Teams application at a lower price, and improve interoperability with rivals, in order to avert a potential antitrust fine from the European Commission. For context, the Commission accepted Microsoft's commitments on September 12, thereby closing its investigation into the firm's bundling practices around Teams. Elsewhere, the company is also facing an antitrust lawsuit in the UK for overcharging businesses and organisations which use rival cloud computing services from Amazon or Google. The present case highlights how regulators worldwide are intensifying scrutiny of Big Tech's pricing and bundling practices. The ACCC's lawsuit against Microsoft underscores growing global concerns over transparency in subscription-based services. Moreover, the case coincides with parallel antitrust actions, including the US class action lawsuit over Microsoft's OpenAI partnership, and investigations in the EU and India into its software bundling. Together, these proceedings reflect a coordinated regulatory focus on ensuring fair competition in the rapidly expanding AI-driven software market. Furthermore, the outcome of the ACCC's case could set an important precedent for how digital platforms disclose pricing changes and optional features to consumers. In turn, this may influence how technology companies structure future AI integrations and subscription models. Ultimately, the present case in Australia shows that regulators are actively holding dominant tech firms to account for failing to give consumers clear, accurate, and transparent information about their products and pricing.

Microsoft faces legal action in Australia over Copilot pricing By Investing.com

Investing.com -- Australia's consumer watchdog has sued Microsoft, claiming the tech giant misled 2.7 million customers by making it difficult to avoid paying for new artificial intelligence services. The Australian Competition and Consumer Commission (ACCC) filed a case Monday in Federal Court alleging Microsoft failed to clearly inform existing Microsoft 365 subscribers how to opt out of paying for Copilot AI tools during subscription renewals. According to the ACCC, Microsoft told users over the past year that their subscription fees would increase to include Copilot. While Microsoft's communications mentioned customers could cancel their subscriptions, the ACCC claims the company only revealed another option - declining Copilot to avoid the added cost while keeping the subscription - after users had already started the cancellation process. The watchdog argues this lack of pricing transparency violates Australian consumer law. The ACCC is seeking fines and refunds for affected customers. Companies can face penalties of up to 50 million Australian dollars (US$32.6 million) for each violation. "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," said ACCC Chair Gina Cass-Gottlieb. She added that many users wouldn't have started cancellation because Microsoft Office apps included in 365 are essential for households and businesses. The ACCC noted that the annual price of a Microsoft 365 Personal plan increased 45% to A$159 after Copilot was added, while a family plan rose 29% to A$179. Microsoft stated it is reviewing the allegations, adding: "Consumer trust and transparency are top priorities for Microsoft. We remain committed to working constructively with the regulator and ensuring our practices meet all legal and ethical standards." This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Australia sues Microsoft over 'misleading' AI offering

Sydney, Australia, Oct 27 (EFE).- Australia's competition regulator filed a lawsuit in the Federal Court on Monday against Microsoft Australia and its parent company, Microsoft Corporation, for allegedly deceiving some 2.7 million users in the country over its new Copilot artificial intelligence (AI) assistant plans. The Australian Competition and Consumer Commission (ACCC) said that starting Oct. 31 last year, the tech company informed users of the automatically renewed Microsoft 365 Personal and Family plans that they must accept the integration of Copilot in the plans-with an annual price increase of 45 percent and 29 percent respectively-or cancel their subscription. However, it did not disclose the existence of 'Classic' plans, which allowed users to maintain the original Personal or Family plans without Copilot and at the previous 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 in a statement. The integration of this AI service resulted in substantial increases in the cost of the service, which is essential for many Australians and companies and, unaware of all the available options, they would have accepted the price increase, according to the regulator. The lawsuit alleges that Microsoft sent two emails and published a blog post informing consumers of the new pricing and the integration of the AI assistant. These communications, according to the ACCC, were "false or misleading" in the omission of the option to maintain the original subscription. The regulator is seeking court orders including penalties, injunctions, declarations, consumer redress, and costs. Maximum fines for violations of the Australian Consumer Law can reach AU$50 million (more than $32.5 million) or 30 percent of the company's turnover during the period of the violation. Microsoft 365, which bundles programs such as Word, Excel, PowerPoint, and cloud services through OneDrive, integrated Copilot as its main generative AI tool starting in late 2024. EFE

Microsoft Sued by Australian Watchdog Over AI Pricing

SYDNEY--Australia's consumer watchdog is suing Microsoft, alleging the U.S. tech giant misled its 2.7 million customers by making it difficult for them to avoid paying for new artificial-intelligence services. The Australian Competition and Consumer Commission filed a case Monday in Federal Court claiming Microsoft didn't clearly tell existing Microsoft 365 subscribers how to opt out of paying for Copilot AI tools when their annual plans renewed. The ACCC argues that over the past year Microsoft informed users their subscription fees would rise to reflect the inclusion of Copilot. Although Microsoft's emails and a blog post told customers they could cancel their subscription, the ACCC alleges the company only revealed another option--to decline Copilot and avoid the added cost while remaining subscribed--after a consumer had already begun the cancellation process. The ACCC said the lack of pricing clarity violates Australian consumer law. It's seeking fines and refunds for affected users. Corporations can faces penalties of as much as 50 million Australian dollars, equivalent to US$32.6 million, for each breach of the law. "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. Many wouldn't have started the cancellation process because Microsoft Office apps included in 365 are essential for households and businesses, Cass-Gottlieb said. Microsoft said it is reviewing the allegations. "Consumer trust and transparency are top priorities for Microsoft. We remain committed to working constructively with the regulator and ensuring our practices meet all legal and ethical standards," Microsoft said. The ACCC said that the annual price of a Microsoft 365 Personal plan jumped 45% to A$159 after Copilot was added, while the cost of a multiple-user family plan rose 29% to A$179. Companies can also be fined three times any financial benefit they gained through a violation of the law.

Australia sues Microsoft over AI-linked subscription price hikes

(Reuters) -Australia's competition regulator on Monday sued Microsoft, accusing it of misleading customers into paying higher prices for Microsoft 365 subscriptions after bundling its AI assistant Copilot into personal and family plans. The Australian Competition and Consumer Commission (ACCC) alleged that from October 2024, the technology giant misled about 2.7 million customers by suggesting they had to move to higher-priced Microsoft 365 personal and family plans that included Copilot. After the integration of Copilot, the annual subscription price of the Microsoft 365 personal plan increased by 45% to A$159 ($103.32) and the price of the family plan increased by 29% to A$179, the ACCC said. The regulator said Microsoft failed to clearly tell users that a cheaper "classic" plan without Copilot was still available. The watchdog said the option to keep the cheaper plan was only revealed after consumers began the cancellation process, a design it argued breached Australian consumer law by failing to disclose material information and creating a false impression of available choices. The ACCC is seeking penalties, consumer redress, injunctions and costs from Microsoft Australia Pty Ltd and its U.S. parent, Microsoft Corp. The ACCC said the maximum penalty that could be imposed on a company for each breach of Australian consumer law was the greater of A$50 million, three times the benefits obtained that were reasonably attributable, or 30% of the corporation's adjusted turnover during the breach period if the value of the benefits could not be determined. "Any penalty that might apply to this conduct is a matter for the Court to determine and would depend on the Court's findings," the regulator said. "The ACCC will not comment on what penalties the Court may impose." Microsoft did not immediately respond to Reuters' request for comment. ($1 = 1.5389 Australian dollars) (Reporting by Sneha Kumar in Bengaluru; Editing by Kim Coghill and Jamie Freed)