What just happened? Just days after facing a potentially costly complaint from Australian regulators, Microsoft is now seeking to resolve the issue amicably. The company has expressed regret over its failure to properly communicate information about cheaper subscription options, though authorities in Canberra could still pursue a harsh penalty.
Microsoft recently began sending apologetic emails to millions of its Australian customers. The company is contacting subscribers of its Microsoft 365 Personal and Family plans to provide details about more affordable options. Redmond has also offered refunds to customers who renewed their cloud subscriptions in 2024 without being informed of the cheaper plans.
Microsoft's apology comes a week after the Australian Competition and Consumer Commission (ACCC) announced legal action against the company. The regulator accused Redmond of misleading roughly 2.7 million Australian customers into paying more for Microsoft 365 plans bundled with the Copilot chatbot.
According to the ACCC, Microsoft gave subscribers few real choices, effectively steering them toward the more expensive Microsoft 365 plans bundled with Copilot. When users attempted to cancel, Redmond offered a third option – keep their old plans under new names at the same price. The Microsoft 365 Personal and Family Classic plans, which lacked any Copilot integration, were significantly cheaper.
"In hindsight, we could have been clearer about the availability of a non-AI-enabled offering with subscribers, not just to those who opted to cancel their subscription," Microsoft said.
Redmond is now sending emails to roughly 3 million Australian customers, outlining lower-cost alternatives to Microsoft 365 plans bundled with Copilot. According to the ACCC, Microsoft should have shared those details with subscribers from the very start, when it came time to renew their plans.
Microsoft is also offering refunds to customers who renewed their Microsoft 365 subscription after November 2024. They can either continue with their current plan, which includes the Copilot chatbot, or switch to Microsoft 365 Personal or Family Classic and receive a refund for the additional amount they paid.
Microsoft said it has operated with trust and transparency in the Australian market for more than 40 years. The company acknowledged falling short of its standards and regrets having to respond to a formal ACCC investigation.
Now the ball is in the regulator's court. It can either drop the lawsuit or continue pursuing it, which could ultimately force Microsoft to pay up to 30 percent of its revenue at the time of its infraction.
Microsoft apologizes for upselling Copilot bundles, offers refunds to millions of users
