Microsoft Australia allegedly misled millions of Aussies to buy more expensive plan: watchdog

Moderated by Tomas Kauer Moderated by Tomas Kauer
Oct 27, 2025 - 01:00
Microsoft Australia allegedly misled millions of Aussies to buy more expensive plan: watchdog

Microsoft Australia is facing court action for allegedly misleading 2.7 million Australians into buying a more expensive 365 subscription plan that included its AI bot "Copilot".

The Australian Competition and Consumer Commission (ACCC) today announced it has launched proceedings in the federal court against the company over allegedly false or misleading communication.

In October last year Microsoft sent two emails and published a blog post telling users who had automatic pay renewal for their Microsoft 365 Personal and Family plans that they had to accept the integration of Copilot and pay higher prices to maintain their subscription, or cancel.

READ MORE: The concerning data that shows scammers are targeting Aussie kidsMicrosoft Australia is facing court action for allegedly misleading 2.7 million Australians into buying a more expensive subscription plan that includes its AI bot Copilot.

The ACCC alleged Microsoft provided false or misleading information because it failed to mention that users had a third option of keeping their existing plan, without Copilot, at the lower price under the classic plan.

Users allegedly only received the option of moving to a classic plan late in the cancellation process.

This meant users who did not cancel saw the annual price for the personal plan jump 45 per cent from $109 to $159, and 29 per cent from $139 to $179 for the family plan.

READ MORE: Labor rules out AI copyright carveout for big tech companiesMicrosoft Australia is facing court action for allegedly misleading 2.7 million Australians into buying a more expensive subscription plan that includes its AI bot Copilot.

ACCC Chair Gina Cass-Gottlieb alleges Microsoft "deliberately" failed to mention the classic plan and "concealed" its existence to increase the number of users on the more expensive Copilot-integrated plans.

"The Microsoft Office apps included in 365 subscriptions are essential in many people's lives, and given there are limited substitutes to the bundled package, cancelling the subscription is a decision many would not make lightly," she said.

"We're concerned that Microsoft's communications denied its customers the opportunity to make informed decisions about their subscription options, which included the possibility of retaining all the features of their existing plan without Copilot and at the lower price.

"We believe many Microsoft 365 customers would have opted for the Classic plan had they been aware of all the available options."

Microsoft 365 Personal and Family plans include Word, Excel, PowerPoint and OneNote, apps like Outlook, Teams and SharePoint and cloud services through OneDrive.

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The ACCC case does not relate to Microsoft 365 Business or Enterprise plans. 

Following an investigation prompted by tip-offs and Reddit posts, the consumer watchdog believes millions of Australians have suffered economic harm.

The ACCC is seeking orders including penalties, injunctions, declarations, consumer redress, and costs in court.

Corporations in breach of consumer law could face a maximum penalty of $50 million.

9news.com.au has contacted Microsoft Australia for comment. 

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