Microsoft faces Australian lawsuit over misleading Microsoft 365 price hike
The Australian Competition & Consumer Commission (ACCC) has filed a lawsuit against Microsoft, accusing the company of misleading roughly 2.7 million Microsoft 365 subscribers into paying for pricier plans. The issue stems from Microsoft’s price increase on its Personal and Family plans, which now include Copilot AI integration.
According to the ACCC, users were told they could either accept the higher-priced AI-enabled plan or cancel their subscriptions altogether. Still, Microsoft failed to mention a cheaper third option: keeping the classic Microsoft 365 plan without Copilot.
After the backlash, Microsoft admitted it could have “been clearer” and began emailing affected users to apologize. The company acknowledged that it should have informed all subscribers, not just those who canceled, about the non-AI plan. It also offered refunds to eligible customers who wished to downgrade to the classic version.
However, users quickly reported problems with Microsoft’s fix. Many received broken links or errors when trying to switch to cheaper plans, and those on Family subscriptions found they couldn’t downgrade at all, while only Personal Classic plans were available. Microsoft later confirmed that some subscribers “received an incorrect link” and promised to resolve the issue.
While Microsoft has apologized and offered refunds, the ACCC isn’t letting go. The regulator said it will continue pursuing penalties, injunctions, and compensation in court, emphasizing that companies must be transparent when altering subscriptions or introducing premium AI features.
In short, Microsoft’s AI push may have backfired by turning what was meant to be an upgrade into a public relations headache.
