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The Redmond giant has apologised to its users after the ACCC took the company to court over allegations it misled “millions of Australians”.
Microsoft has apologised to Australian subscribers of its Microsoft 365 platform following allegations it misled users regarding price increases in the wake of Copilot integration.
The Australian Competition and Consumer Rights Commission said last month it was taking the software maker to court regarding allegations that the company had misled about 2.7 million Australians.
“Today we began reaching out to our Microsoft 365 Personal and Family subscribers in Australia regarding a subscription alternative that we could have communicated more clearly when we changed our pricing in October 2024,” Microsoft said in a November 6 blog post.
“In response to the demand for advanced AI tools, we introduced AI capabilities into the Microsoft 365 Personal and Family subscriptions that we offer in Australia. In hindsight, we could have been clearer about the availability of a non-AI-enabled offering with subscribers, not just to those who opted to cancel their subscription. In our email to subscribers, we expressed our regret for not being clearer about our subscription options, shared details about lower-priced alternatives that come without AI and offered a refund to eligible subscribers who wish to switch.
“We have been present in Australia for more than 40 years, operating on the principles of trust and transparency. We fell short of our standards here, and we apologise. We will learn from this and improve.”
Microsoft has sent out updated emails to its subscribers with a more transparent set of subscription options.
The ACCC said it made its decision to take Microsoft to court following a “detailed investigation” into the company’s communications with its Australian subscribers.
“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.
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 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.”
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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