The Australian Competition and Consumer Commission (ACCC) is taking legal action against Microsoft Australia for allegedly hiking subscription prices after integrating its AI assistant into Microsoft 365 plans.
The consumer watchdog alleges that the tech giant told subscribers of Microsoft 365 plans that they must accept the integration of Copilot and pay higher prices for their plan to cancel their subscriptions.
In the lawsuit, the ACCC stated that this message was misleading because it failed to disclose a third option, which would have allowed subscribers to retain their Microsoft 365 plans without Copilot at the previous lower price.
The ACCC believes that Microsoft did not communicate plans properly with subscribers, as it was only on the page following the subscription cancellation that they were given the option to move to the Classic plan.
ACCC Chair Gina Cass-Gottlieb said this creates issues as there are few replacements for the services Microsoft provides.
“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,” Cass-Gottlieb said.
“We believe many Microsoft 365 customers would have opted for the Classic plan had they been aware of all the available options.”
The integration of Copilot boosted the annual subscription price by 45% from A$109 to $159 for personal plans and by 29% for family plans from $139 to $179.
Microsoft sent two emails and published a blog post informing customers of the Copilot integration and subsequent price increase that would apply in their next renewal, that have become central to the ACCC’s case.
“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,” Cass-Gottlieb said.
“All businesses need to provide accurate information about their services and prices. Failure to do so risks breaching the Australian Consumer Law.”
ABC News reported in February that a customer reported Microsoft to the regulator over pricing changes.
