Microsoft (NASDAQ:MSFT) is in Australia’s crosshairs as the country has sued the tech giant for what it claims are “misleading” Microsoft 365 subscriptions price hikes, linked by artificial intelligence.
The Australian Competition and Consumer Commission alleges that Microsoft misled 2.7M Australian consumers into paying higher prices for Microsoft 365, after it introduced its AI Copilot, starting in October 2024.
After Copilot was added to Microsoft 365, the tech giant raised the price on the Microsoft 365 Personal plan increased by 45% to $159, from $109. It also raised the price of the annual subscription price for the Microsoft 365 Family plan by 29% to $179, from $139.
“Following a detailed investigation, we will allege in Court that Microsoft deliberately omitted reference to the Classic plans in its communications and concealed their existence until after subscribers initiated the cancellation process to increase the number of consumers on more expensive Copilot-integrated plans,” ACCC Chair Gina Cass-Gottlieb said in a statement.
Microsoft sent two emails and wrote a blog post about the auto-renewal for subscribers, which included mention of Copilot being integrated and the subsequent price increase.
“We allege that Microsoft’s two emails to existing subscribers and the blog post were false or misleading as they conveyed that consumers had to accept the more expensive Copilot-integrated plans, and that the only other option was to cancel,” Ms Cass-Gottlieb added. “All businesses need to provide accurate information about their services and prices. Failure to do so risks breaching the Australian Consumer Law.”
The ACCC said it is seeking penalties, injunctions, declarations, consumer redress, and costs.
Microsoft did not immediately respond to a request for comment from Seeking Alpha.