Microsoft has apologised and begun refunding customers after a consumer watchdog called the company out for misleading around 2.7 million Australians.
This was in response to the Australian Competition and Consumer Commission (ACCC) suing the tech giant for allegedly misleading Australian customers over its Microsoft 365 subscriptions.
In an apology, Microsoft said it “fell short of [its] standards” and has contacted all affected subscribers.
“Today we began reaching out to our Microsoft 365 Personal and Family subscribers in Australia regarding a subscription alternative that we could have communicated more clearly when we changed our pricing in October 2024,” the company said.
“In our email to subscribers, we expressed our regret for not being clearer about our subscription options, shared details about lower-priced alternatives that come without AI and offered a refund to eligible subscribers who wish to switch.”
In its lawsuit, the ACCC said that Microsoft failed to disclose a cheaper plan that didn’t include its AI assistant Copilot.
Microsoft allegedly told subscribers they must accept the integration of Copilot and pay a higher price for their personal or family plan, or cancel their subscription.
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 said customers who opted to switch back to the cheaper plan by the end of 2025 would receive their refunds within 30 days for any payments dating back to 30 November.
ACCC chair Gina Cass-Gottlieb welcomed the update but said it was not a result of a settlement with the regulator.
"We continue to seek penalties, injunctions, declarations, effective consumer redress, and costs in court," she said.
“As the matter is before the court we will not be providing further comment.”
