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Australia’s competition watchdog has launched legal action against Microsoft, accusing the tech giant of misleading millions of users into paying extra for its AI assistant, Copilot.
The Australian Competition and Consumer Commission (ACCC) filed the case in the Federal Court against Microsoft Australia and its parent company, claiming they made “false or misleading” statements to around 2.7 million Microsoft 365 subscribers who auto-renew their plans.
According to the ACCC, Microsoft told customers they could either pay more for 365 plans that included Copilot or cancel their subscriptions. However, a third option—keeping their existing “Classic” plans without Copilot at the original price—was only revealed when users began the cancellation process.
ACCC chair Gina Cass-Gottlieb said Microsoft’s omission was deliberate, designed to push more users toward higher-priced plans.
The regulator alleges the misleading conduct has affected subscribers on personal and family plans since October 31, 2024. Copilot-integrated plans reportedly cost 29 to 45 percent more than those without.
The ACCC is seeking penalties, injunctions, compensation for consumers, and legal costs. Microsoft could face fines of more than A$50 million (US$30 million) per breach.
Microsoft has not yet responded to the allegations.
