Australian Competition and Consumer Commission (ACCC) has filed a lawsuit against Microsoft Australia and its parent company, Microsoft Corp, alleging that the tech giant misled millions of customers into paying more for its AI assistant, Copilot.
The ACCC announced on Monday that the case had been lodged in the Federal Court, accusing Microsoft of making “false or misleading” representations to approximately 2.7 million Australians subscribed to Microsoft 365 plans.
According to the regulator, Microsoft presented customers with only two options—upgrade to more expensive Copilot-integrated plans or cancel their subscriptions—while concealing a third, cheaper alternative known as the “Classic” Microsoft 365 plan, which did not include Copilot.
“Microsoft deliberately omitted reference to the Classic plans in its communications and concealed their existence until after subscribers initiated the cancellation process,” said ACCC Chair Gina Cass-Gottlieb.
She described the conduct as particularly troubling, given the essential nature of Office applications in both professional and personal settings.
The ACCC alleges that the misleading conduct began on October 31, 2024, and affected personal and family plan subscribers. The Copilot-integrated plans reportedly cost between 29 and 45 per cent more than the standard versions.
The commission is seeking penalties, injunctions, consumer redress, and legal costs. Microsoft could face fines exceeding A$50 million (US$30 million) for each breach.
As of press time, Microsoft had not responded to requests for comment.
