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Key Points
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The ACCC filed a lawsuit against Microsoft for hiding cheaper Microsoft 365 plans.
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Users claim prices jumped by up to 45% after Copilot was added.
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Classic subscription plans were available but difficult to find.
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The case could reshape how global tech companies handle AI pricing and consumer transparency.
ACCC Claims Microsoft Misled 2.7 Million Users
The Australian Competition and Consumer Commission (ACCC) alleges Microsoft deceived about 2.7 million customers when it rolled out AI Copilot across Microsoft 365 personal and family subscriptions. According to the regulator, Microsoft gave users two visible options: accept the new Copilot-integrated plan with higher prices, or cancel their subscriptions altogether.
The ACCC argues this was misleading. There was a third choice — the “Classic” subscription plans — which kept all original features at the old rates, without the Copilot tool or the 45% increase in cost. These Classic plans were hidden within several layers of the account management process, only appearing after users attempted to cancel their existing plan.
The ACCC says Microsoft used its market power to conceal cheaper alternatives and push users toward more expensive subscriptions. ACCC Chair Gina Cass-Gottlieb stated, “We will allege in court that Microsoft deliberately omitted reference to the Classic plans in its communications to increase the number of consumers on more expensive Copilot-integrated plans.”
How Microsoft 365 and Copilot Triggered the Dispute
Microsoft’s integration of Copilot into Microsoft 365 was part of its global AI expansion strategy. The assistant combines OpenAI’s technology with Microsoft apps like Word, Excel, and Outlook. However, this update came with a sharp rise in prices and no clear option to stay on older versions.
The lawsuit suggests Microsoft’s pricing strategy blurred the line between innovation and manipulation. Customers were told they must pay more for AI features even if they did not want them. From my perspective, this shows a growing tension between user choice and the push for AI monetization.
The AI pricing model has become a test for regulators worldwide. The ACCC’s lawsuit could inspire similar cases in other regions where consumers face limited transparency on AI-driven upgrades.
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What Microsoft’s Response Could Mean
Microsoft has not yet issued a formal public response. The company’s silence has raised speculation about whether it will defend its pricing choices or offer settlements to Australian consumers.
If the ACCC succeeds, Microsoft could face penalties and might be forced to change how it markets AI-integrated subscriptions. Legal experts believe this case might set a global precedent for how companies disclose AI pricing structures and user options.
AI pricing transparency is becoming a defining issue for regulators. If Microsoft loses, other tech giants integrating AI tools into paid subscriptions could face tighter scrutiny.
Impact on Users and Subscription Plans
For users, the case exposes how complex subscription ecosystems can limit awareness of available plans. Many users rely on auto-renewal without realizing they can downgrade or switch. The ACCC says Microsoft’s decision to hide the Classic plan option during renewal “significantly reduced consumer choice.”
This situation also highlights how companies use AI rollouts to justify steep price jumps. While Copilot adds functionality, it raises the question of whether consumers should pay more for tools they never opted into.
If Microsoft offers compensation or forced refunds, it might lead to renewed trust in subscription transparency. For now, users are watching closely to see how this legal battle unfolds.
