Australia’s competition regulator has filed a lawsuit against Microsoft, accusing the tech giant of misleading millions of users over price increases tied to AI integration in its Microsoft 365 subscription plans.
ACCC Alleges Misleading Conduct Over Copilot Integration
The Australian Competition and Consumer Commission (ACCC) claims Microsoft failed to properly disclose price changes following the rollout of its Copilot AI tool, which added generative AI features to apps such as Word, Excel, and Outlook.
According to court filings, about 2.7 million customers were impacted by significant price hikes — with the Microsoft 365 Personal plan rising by 45% and the Family plan by 29%. The ACCC alleges Microsoft automatically presented these higher-priced AI-enabled plans as the default renewal option, while a cheaper “classic” version remained hidden unless users tried to cancel their subscription.
Regulator: “Microsoft Took Advantage of Consumer Trust”
In its statement, the ACCC said Microsoft’s approach created a “false impression” that the new Copilot-integrated plans were the only available option. “Microsoft took advantage of consumers’ trust in its brand and product ecosystem,” the regulator said.
The case centers on whether bundling AI features into existing products without transparent pricing or opt-out options constitutes deceptive conduct under Australian consumer law.
Broader Implications for AI Pricing Transparency
Microsoft’s Copilot, powered by OpenAI’s GPT technology, has been promoted as a major productivity upgrade, enabling users to automate writing, data analysis, and communication tasks. However, the lawsuit highlights growing global scrutiny of how companies price and communicate AI integrations within established software ecosystems.
If found guilty, Microsoft could face hefty financial penalties and tighter regulations around its pricing models. Legal experts say the case may set an international precedent for AI-related subscription transparency, potentially influencing how tech giants introduce and monetize AI-driven tools.
Microsoft’s Response and Industry Reactions
Microsoft has yet to issue a detailed statement but has previously defended its approach as a “transparent upgrade” that delivers “measurable productivity value.” The company maintains that Copilot’s pricing reflects the cost of developing and maintaining cutting-edge AI capabilities for consumers.
Analysts suggest the case could redefine industry standards, as regulators worldwide weigh the ethics of AI bundling and price disclosure. With AI becoming a core part of digital services, this lawsuit could shape the balance between innovation, transparency, and consumer protection in the AI era.
