Microsoft Sued in Australia Over 365 Price Hikes Tied to AI Copilot Rollout

Australia’s competition regulator is suing Microsoft, alleging the software giant deliberately misled 2.7 million customers about cheaper subscription alternatives when it forced its AI assistant, Copilot, into Microsoft 365 plans alongside steep price increases.

The Australian Competition and Consumer Commission filed proceedings on Sunday against Microsoft Australia and its U.S. parent corporation, alleging the company provided subscribers with false information about their options after integrating Copilot into personal and family.

Microsoft reportedly told auto-renewing subscribers they had two choices: accept Copilot integration with higher prices, or cancel their subscription entirely, according to the ACCC.

The regulator alleges this was misleading because a third option existed, Microsoft 365 Personal and Family “Classic” plans that retained all original features without Copilot at the previous lower prices.

The only way customers could discover these alternatives was by navigating to their account’s subscription section, selecting “Cancel subscription,” the regulator said, and proceeding through the cancellation flow until reaching a page that finally revealed the Classic plan option.

“Following a detailed investigation, we will allege in Court that Microsoft deliberately omitted reference to the Classic plans in its communications and concealed their existence until after subscribers initiated the cancellation process to increase the number of consumers on more expensive Copilot-integrated plans,” ACCC Chair Gina Cass-Gottlieb said in a statement.