Microsoft Faces Court Action Over Alleged Misleading of 2.7 Million Australian Customers

Australia’s competition regulator, the Australian Competition & Consumer Commission (ACCC), has initiated Federal Court proceedings against Microsoft Corporation and its Australian subsidiary over claims that the tech giant misled around 2.7 million Australian consumers about changes to Microsoft 365 Personal and Family subscriptions. The case stems from Microsoft’s integration of its AI assistant, Copilot, into those plans and the accompanying price increases.


According to the ACCC’s documents, beginning 31 October 2024 Microsoft informed subscribers with auto-renew enabled that they had only two choices: accept the Copilot integration and the higher renewal price, or cancel their subscription. The regulator alleges that Microsoft omitted reference to the “Classic” plan, which would have allowed users to retain their existing features at the lower price without Copilot. The only way to access the Classic plan was via the cancellation process. The ACCC claims these communications were “false or misleading” by giving the impression that no third option existed.

Following the update, the annual cost of the Microsoft 365 Personal plan rose by 45 %, from AUD $109 to $159, while the Family plan increased by 29 %, from $139 to $179.

ACCC Chair Gina Cass‑Gottlieb emphasised that the bundled Office apps are “essential in many people’s lives” and noted that the alleged misleading deprived consumers of an informed choice about their subscriptions.

The ACCC is seeking a range of enforcement measures including penalties, injunctions, declarations and consumer redress. Under the Australian Consumer Law, the maximum penalty for each breach is the greater of $50 million, three times the benefit obtained, or 30 % of the adjusted turnover during the breach period.

Microsoft’s conduct in Australia will now be scrutinised in court amid growing global regulatory attention on how tech companies handle subscription changes and consumer communications.