Tuesday, October 28, 2025 - Australia’s competition watchdog has accused Microsoft of misleading millions of customers into paying more for its AI assistant, Copilot, by allegedly hiding cheaper subscription options.
The Australian Competition and Consumer Commission (ACCC)
announced on Monday that it had filed a lawsuit in the Federal Court against
Microsoft Australia and its parent company, Microsoft Corp, claiming the tech
giant made “false or misleading” statements to around 2.7 million Australians
subscribed to Microsoft 365 plans.
According to the regulator, Microsoft informed customers
that they only had two options, either pay extra for Microsoft 365 plans
integrated with Copilot or cancel their subscriptions altogether. However,
there was a partly hidden third option that allowed users to continue with the
older “Classic” Microsoft 365 plans at the original price, without Copilot.
“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,” said ACCC chair Gina
Cass-Gottlieb.
She added that Microsoft’s conduct was particularly
concerning because Office apps are essential in many people’s professional and
personal lives, making it unlikely that customers would easily choose to cancel
their subscriptions.
The ACCC alleges that Microsoft misled personal and family
plan subscribers since October 31, 2024, noting that the Copilot-integrated
plans cost 29% to 45% more than the standard ones.
The commission is seeking penalties, injunctions, consumer
redress, and legal costs, with Microsoft potentially facing fines of over A$50
million (US$30 million) for each breach.
Microsoft has not yet responded to requests for comment.
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