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The consumer rights regulator alleges that software giant Microsoft misled approximately 2.7 million Australian customers regarding price increases in the wake of Copilot integration into Microsoft 365.
The Australian Competition and Consumer Rights Commission (ACCC) has said it is taking Microsoft to court regarding allegations that the company had misled about 2.7 million Australians regarding price increases and subscription options in Microsoft 365.
“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 27 October statement.
According to the ACCC, from 31 October, Microsoft told subscribers of its Microsoft 365 Personal and Family plans that they must accept the integration of Microsoft’s Copilot AI assistant, or else cancel their subscriptions or pay higher prices.
The ACCC alleges, however, that this information was “false or misleading,” as it did not disclose the existence of a third option – the Microsoft 365 Personal or Family Classic plans – which offered the same features, but without Copilot integration.
The only way consumers could have known about the existence of those options was to begin the cancellation process.
“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,” Cass-Gottlieb 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 sent its customers two emails and made one blog post regarding Copilot integration and the subsequent price increase. The ACCC said: “These three pieces of communication are central to the ACCC’s case.”
Cass-Gottlieb said: “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.”
“All businesses need to provide accurate information about their services and prices. Failure to do so risks breaching the Australian Consumer Law.”
The ACCC is seeking orders including “penalties, injunctions, declarations, consumer redress, and costs”.
Microsoft said it is looking into the ACCC’s allegations
“Consumer trust and transparency are top priorities for Microsoft, and we are reviewing the ACCC’s claim in detail,” a Microsoft spokesperson told Cyber Daily.
“We remain committed to working constructively with the regulator and ensuring our practices meet all legal and ethical standards.”
David Hollingworth has been writing about technology for over 20 years, and has worked for a range of print and online titles in his career. He is enjoying getting to grips with cyber security, especially when it lets him talk about Lego.
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