ACCC Sues Microsoft for Misleading Australian Consumers

The Australian Competition and Consumer Commission (ACCC) recently filed a lawsuit against Microsoft, accusing the company of misleading approximately 2.7 million Australian personal and household users after integrating the AI assistant Copilot into Microsoft 365 subscription plans on October 31, 2024.

The ACCC stated that Microsoft’s promotion only informed users that they would need to accept the new Copilot-inclusive plan and pay a higher fee, or cancel their subscription. It did not clearly indicate that users could retain the original “Classic Plan” without Copilot. This option was only presented when users started the cancellation process, leading many consumers to upgrade or cancel without full knowledge.

Microsoft responded that it will carefully review the ACCC’s claims, emphasizing that consumer trust and transparency are priorities and that it will cooperate with regulators to ensure all practices comply with legal and ethical standards.

The ACCC is seeking court orders, including fines, injunctions, consumer compensation, and litigation costs. Experts say that if Microsoft is found guilty of misleading behavior, it could face significant fines and set an important precedent for transparency in subscription services and AI promotion globally.