The Australian Competition and Consumer Commission (ACCC) has, on Monday, sued Microsoft, accusing the tech giant of misleading about 2.7 million customers into paying higher subscription fees for its Microsoft 365 plans, Reuters reports.
According to the ACCC, Microsoft suggested users had to upgrade to more expensive Microsoft 365 Personal and Family plans bundled with its AI assistant, Copilot, introduced in October 2024. The annual subscription for the Personal plan rose 45% to A$159 ($103), while the Family plan increased 29% to A$179.
The commission’s case centers on claims that Microsoft failed to “clearly” inform users that a cheaper “classic” plan without Copilot was still available. The software giant, it adds, conveniently revealed the option only after users began the cancellation process, a design choice the ACCC says violates Australian Law.
This is not the first time Microsoft Corporation has faced legal action relating to pricing or bundling tactics. In the U.S. In the U.S., Microsoft faced antitrust scrutiny and lawsuits for tying its products together (such as bundling web browsers with Windows), which ultimately raised concerns about pricing power and consumer choice. And more recently, Microsoft reached an agreement with the European Commission to unbundle its Teams collaboration app from Microsoft 365, following pressure from competitors and EU regulators over alleged unfair pricing practices.
A Microsoft spokesperson told Reuters the company is reviewing the ACCC’s claims, as the regulator is seeking penalties, injunctions, and consumer redress, noting potential fines could reach A$50 million per breach or up to 30% of turnover if the gains cannot be determined.