ACCC sues Microsoft over Copilot pricing to 2.7 million subscribers

Australia's competition regulator filed a Federal Court lawsuit on Monday alleging Microsoft misled about 2.7 million Australian subscribers after integrating its Copilot artificial intelligence assistant into Microsoft 365 personal and family plans. The Australian Competition and Consumer Commission says Microsoft Australia and its U.S. parent, Microsoft Corporation, told autorenewing customers they either had to accept Copilot and pay higher prices or cancel their subscriptions, without disclosing a cheaper alternative that preserved existing features.

According to court documents and the ACCC's statement, Microsoft began notifying affected subscribers on October 31, 2024, that Copilot would be added to Microsoft 365 plans and that prices would increase. The ACCC says annual fees for the Personal plan rose from A$109 to A$159, a 45 percent jump, and the Family plan rose from A$139 to A$179, a 29 percent increase. The regulator alleges those communications presented only two choices to users and concealed a third option, the Microsoft 365 Classic plans, which retain prior features without Copilot at the lower price.

ACCC Chair Gina Cass-Gottlieb said in a statement that the...