Catenaa, Tuesday, October 28, 2025-Australia’s competition regulator filed a lawsuit against Microsoft on Monday, alleging the company misled millions of customers into paying higher prices for its Microsoft 365 software after bundling it with the AI tool Copilot.
The Australian Competition and Consumer Commission (ACCC) said the price of the Microsoft 365 personal plan jumped 45% to A$159 ($103.32) and the family plan rose 29% to A$179 following the Copilot integration.
Regulators claimed Microsoft failed to clearly disclose that a cheaper “classic” plan without Copilot was still available, only revealing this option when users initiated the cancellation process.
The ACCC argued that Microsoft’s communications, including emails and a blog post, misrepresented available choices and breached Australian consumer law by omitting material information.
The regulator is seeking penalties, consumer redress, injunctions, and legal costs from both Microsoft Australia Pty Ltd and its U.S. parent company.
Under Australian law, maximum penalties for breaches can reach the greater of A$50 million, three times the benefits obtained, or 30% of adjusted corporate turnover during the breach period.
The ACCC emphasized that any fines would be determined by the court after reviewing the evidence.
A Microsoft spokesperson said the company is examining the ACCC’s claims in detail.
The case highlights growing scrutiny of technology companies’ AI-driven product strategies and subscription pricing, and could set a precedent for transparency in software bundling and consumer disclosure.
