Australia’s competition watchdog has filed Federal Court proceedings against Microsoft Corp (NASDAQ:MSFT) Australia and its US parent, alleging the tech giant misled about 2.7 million customers on Microsoft 365 subscription choices and price rises.
The Australian Competition and Consumer Commission (ACCC) says that when Microsoft lifted Microsoft 365 prices by up to 45% in October 2024, it told users they had to accept integration of the new Copilot feature and pay higher fees to keep their subscription, or cancel altogether.
According to the regulator, that messaging was false or misleading because Microsoft failed to disclose a third option: continuing on the existing plan—without Copilot—at the previous, lower prices.
ACCC chair Gina Cass-Gottlieb said the watchdog will allege Microsoft “deliberately omitted references to the lower price plan,” revealing its existence only after subscribers initiated cancellations. “We believe many Microsoft 365 customers would have opted for the ‘Classic plan’ had they been aware of all the available options,” she said.
“All businesses need to provide accurate information about their services and prices. Failure to do so risks breaching the Australian Consumer Law,” Cass-Gottlieb added.