Microsoft Apologizes to 2.7M Australians Over Copilot Pricing

Microsoft has issued an apology to approximately 2.7 million Australian subscribers of its Microsoft 365 Personal and Family plans, acknowledging shortcomings in how it communicated subscription options following price increases tied to the integration of its Copilot AI assistant. The move comes days after the Australian Competition and Consumer Commission filed a lawsuit in Federal Court, accusing the company of misleading customers into higher-cost plans. The developments unfolded in Australia, with emails to affected users sent on Thursday.

The dispute centers on changes Microsoft implemented in October 2024, when it added Copilot features to the subscriptions. This resulted in annual price hikes: the Personal plan rose 45 percent from AU$109 to AU$159, while the Family plan increased 29 percent from AU$139 to AU$179. According to the ACCC, Microsoft's communications, including two emails and a blog post, presented customers with only two choices: accept the updated plans with Copilot at the new prices or cancel their subscriptions. The regulator alleged this omitted a third option, the Microsoft 365 Personal and Family Classic plans, which retain core features without...