Australia sues Microsoft for hiding cheaper Microsoft 365 plans without Copilot

[Alfonso Maruccia]

Editor's take: Microsoft 365 has provided Redmond with a steady stream of cloud-based revenue since 2010 (the productivity suite formerly known as Office 365). Now it's also become a vehicle for Microsoft's AI ambitions – and, potentially, its legal trouble. Australian regulators say the company crossed the line when it used the platform's dominance to push customers toward Copilot, arguing that the way Microsoft bundled (and priced) its AI assistant may have misled millions of users.

The Australian Competition & Consumer Commission (ACCC) is taking Microsoft to the country's federal court. The agency is suing Microsoft Australia and Microsoft Corporation, alleging that the company misled approximately 2.7 million Australian customers over subscription price changes and alternative renewal options.

The dispute dates back to October 31, 2024, when Microsoft notified its subscribers that the Microsoft 365 Personal and Family plans would integrate the Copilot chatbot. To continue using the cloud service, customers had to accept the integration and pay a higher price; otherwise, they were asked to cancel their subscription.

The ACCC has described this forced choice as misleading or deceptive, noting that customers actually had a third, previously undisclosed option: the Microsoft 365 Personal or Family Classic plans. These plans retained all the features of the original subscriptions, were significantly cheaper, and did not include Copilot integration.

Microsoft made no explicit reference to the "Classic" plans without Copilot, the ACCC said, and only offered them to customers who were about to cancel their Microsoft 365 subscriptions. The Australian regulator provided a damning screenshot showing Microsoft's behavior and is now accusing the company of deliberately hiding the Classic plans to promote 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," the ACCC said.

The organization collected a significant number of complaints and consumer reports, as well as user comments from online forums such as Reddit. The ACCC is now seeking punitive measures against Microsoft, which could include penalties, injunctions, or other undisclosed costs. In a worst-case scenario, Microsoft could be required to pay up to 30 percent of the revenue collected during the alleged unlawful conduct.

After being hit with the ACCC lawsuit, Microsoft stated that consumer trust and transparency remain its top priorities. The company emphasized its constructive engagement with regulatory agencies, despite ongoing scrutiny from antitrust authorities worldwide. Copilot is now an integral part of every Microsoft 365 installation, except for customers in the European Union.

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Australia sues Microsoft for hiding cheaper Microsoft 365 plans without Copilot

 

[user556]

Completely regular practice for M$. Forcing "upgrades" is their bread and butter. Monopolies are the free market way.

 

[JMGuy]

Monopolies are the free market way.

Happy to hate on Microshaft, but I’d quibble over calling this a monopoly in the context of the article. People have plenty of free and capable alternatives in this space (Google Docs, Apple iWork, LibreOffice, etc.), which makes Microsoft more a matter of convenience than a lack of choice. They might dominate visibility, but options absolutely exist — and I always encourage folks to explore anything alternative to Microshank whenever possible.

That said, there are plenty of other markets where we can throw the monopolistic hammer at Microturd — and we absolutely should. Throw it hard. ;-)

 

[daffy duck]

Good, there is no way I could find any non-copilot Office 365 plans for sale anywhere, let alone on M$ website. Straight up $30 price increase for AI trash I have never once used.

 

[user556]

Happy to hate on Microshaft, but I’d quibble over calling this a monopoly in the context of the article. People have plenty of free and capable alternatives in this space (Google Docs, Apple iWork, LibreOffice, etc.), which makes Microsoft more a matter of convenience than a lack of choice. They might dominate visibility, but options absolutely exist — and I always encourage folks to explore anything alternative to Microshank whenever possible.

That's more a nit-pick. M$Office is a functional monopoly even if options appear to be there. It's so overwhelmingly controlled that it only takes one expression of disdain from another person to flip a hard won friend/colleague/relative back to the dark side. So few people are actually skilled on a computer, they just don't have any confidence to stick with "different".

 

[ScottSoapbox]

Good. There attempted price increase got me off of 365 to Office 2024. (Work forces me to have Office but I am done with subscriptions for products getting worse over time.)

 

[Later]

Way to go Australia, sue the bastards for the way of keeping users at gunpoint or cornering them between a rock and a hard place. This is happening because nobody put a fist in their mouth's.

 

[OortCloud]

The forced upgrade to office 365 with Copilot (with the additional cost) was hugely dishonest as usual. To get back to normal Office 365 (which they now call 'office 365 classic edition') you have to cancel your Office 365 with Copilot at which point they suddenly offer a new option to not cancel but pay the same money as before for the same subscription as before. It's really mucky practice and almost certainly against the law but like all the big tech corporations in the states now its open-season.