Australia Sues Microsoft Over Alleged Misleading Subscription Tactics
Australia Takes Legal Action Against Microsoft Over Subscription Practices
The Australian Competition and Consumer Commission (ACCC) has initiated legal proceedings against Microsoft, accusing the technology company of deceptive practices regarding its Microsoft 365 subscription services. The case centers on allegations that Microsoft failed to properly disclose all available subscription options to customers.
The Core Allegations
According to the ACCC, Microsoft informed users of its Microsoft 365 Personal and Family plans that they faced a binary choice:
- Accept integration with Copilot AI features at a higher subscription cost
- Cancel their subscriptions entirely
The regulatory body contends that Microsoft deliberately omitted information about a third option: the "Microsoft 365 Personal or Family Classic Plan". This alternative would allow users to maintain their current feature set at lower pricing without adopting Copilot functionality.
Image source note: The image was generated by AI, and the image licensing service provider is Midjourney.
Background of the Dispute
The controversy traces back to January 2025 when tech publication The Register reported Microsoft's plans to increase Microsoft 365 pricing to reflect Copilot integration. While Microsoft acknowledged it would offer a "classic" plan alternative, this option allegedly didn't appear in customer communications during subscription renewal processes.
ACCC Chair Gina Cass-Gottlieb stated: "Our investigation suggests Microsoft intentionally obscured information about the classic plan during cancellation flows. This deprived consumers of transparent choices regarding their subscriptions."
The commission argues this practice constituted misleading conduct under Australian consumer law by failing to inform customers they could continue subscriptions at lower rates while retaining original features.
Industry Context and Response
The lawsuit emerges amid growing global scrutiny of tech companies' subscription practices. When contacted by The Register, Microsoft initially declined comment but later provided an official statement acknowledging receipt of the ACCC's filing.
The case coincides with another significant Australian policy decision regarding technology regulation. The federal government announced it would not create copyright law exemptions permitting AI companies unrestricted content scraping for model training.
Australian Attorney-General Michelle Rowland emphasized: "Australian creators deserve robust copyright protections in this evolving digital landscape."
Key Points:
- 🌟 Regulatory Action: ACCC sues Microsoft over alleged misleading subscription practices for Microsoft 365 users.
- 📉 Disclosure Issues: Claims Microsoft didn't inform customers about cheaper "Classic Plan" alternative to Copilot-integrated subscriptions.
- ⚖️ Policy Context: Case occurs alongside Australia's decision against AI copyright exceptions.
