- Microsoft is being sued by the Australian competition regulator for allegedly misleading 2.7 million customers about subscription options.
- The regulator claims Microsoft hid a cheaper Microsoft 365 “Classic” plan during subscription changes involving the AI assistant Copilot.
- Subscribers were told to either pay more for Copilot or cancel, while the Classic plan appeared only within the cancellation process.
- The investigation was triggered by consumer complaints and Reddit posts that exposed the hidden Classic option.
- The regulator seeks penalties, injunctions, and consumer compensation for this alleged deceptive practice.
Australia’s competition watchdog has taken legal action against Microsoft Australia and its U.S. parent company. The regulator alleges that on October 31 last year, Microsoft misled 2.7 million subscribers by not clearly offering a cheaper alternative when it introduced its AI assistant, Copilot, into Microsoft 365 personal and family plans.
The Australian Competition and Consumer Commission (ACCC) says Microsoft informed auto-renewing subscribers of only two options: accept Copilot with higher prices or cancel their subscription entirely. In truth, a third option existed, the Microsoft 365 Personal and Family “Classic” plans, which kept the original features without Copilot and were priced lower.
According to the ACCC, the Classic plans were concealed and could only be found by going through the “Cancel subscription” flow in the user’s account settings. ACCC Chair Gina Cass-Gottlieb stated, “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.”
The investigation was prompted by consumer complaints, online discussions on Reddit revealing the hidden option, and tips to the ACCC’s Infocentre. The watchdog is seeking court orders including penalties, injunctions, declarations, consumer redress, and costs.
Legal experts emphasize that companies must clearly show all available options rather than hiding cheaper plans in difficult-to-find areas like cancellation flows. Joni Pirovich, CEO of Crystal aOS, noted concerns about the approval process for this rollout, while lawyer Alex Chandra stated that simply making an option available but hidden is usually insufficient.
Microsoft also faces a U.S. class-action suit alleging similar anti-competitive behavior related to its 2019 exclusive agreement to provide OpenAI with computing power, potentially inflating ChatGPT prices while developing competing AI products.
For full details, see the ACCC’s filing and their media release.
✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.
