Microsoft will face the Federal Court for allegedly misleading millions of customers about how Copilot would change their subscriptions.
From October 2024, Microsoft allegedly gave its existing 2.7 million Australian customers two options: either pay a higher price for their subscription to Microsoft 365 or cancel before the next billing date.
With Copilot, the annual subscription of “Personal” plans increased from $109 to $159, while “Family” increased from $139 to $179.
In failing to disclose there was an option to retain the existing plan at a lower cost, but without Copilot, the Australian Competition and Consumer Commission (ACCC) alleged Microsoft Australia and parent company Microsoft Corporation breached consumer law.
Chair Gina Cass-Gottlieb said the ACCC will allege Microsoft omitted reference to the “Classic” plans and concealed evidence of this until after subscribers had opted to cancel their plan. It was only after they navigated to the page on its website that the option was provided.
“The Microsoft Office apps included in 365 subscriptions are essential in many people’s lives, and given there are limited substitutes to the bundled package, cancelling the subscription is a decision many would not make lightly,” Cass-Gottlieb said.
“We’re concerned Microsoft’s communications denied its customers the opportunity to make informed decisions about their subscription options, which included the possibility of retaining all the features of their existing plan without Copilot and at the lower price.”
Cass-Gottlieb added the ACCC believed customers would have opted for the Classic plan had they been aware of the option.
The ACCC will rely on two emails sent by Microsoft and a blog post.
In the blog post, published in late October 2024, Microsoft wrote: “To reflect the value we’ve added over the past decade and enable us to deliver new innovations for years to come, we’re increasing the prices of Microsoft 365 Personal and Family.”
The ACCC said it drew on consumer reports and online commentary in its investigation, including from forums such as Reddit.
It is seeking orders including penalties, injunctions, consumer redress and costs.
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
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