Australia sues Microsoft over misleading Copilot subscription bundling
The Australian Competition and Consumer Commission sued Microsoft for allegedly misleading 2.7 million customers by bundling the Copilot AI assistant with Microsoft 365 subscriptions and failing to clearly communicate that the tool was optional or that opting out would prevent a planned 45% price increase. The ACCC claims Microsoft's web design made consumers believe they could only pay more or cancel their subscriptions.
What happened
The Australian Competition and Consumer Commission sued Microsoft in federal court, alleging the company deceived 2.7 million users by bundling its Copilot AI assistant with Microsoft 365 subscriptions.
Microsoft informed users that costs would increase 45% on October 31, 2024, but allegedly failed to explain that Copilot was optional or warn that opting out would prevent the cost increase. The ACCC claims Microsoft's web design made consumers believe they could only pay more or cancel their subscription.
Reported impact
The ACCC asserts that consumers were misled into paying higher prices for Microsoft 365 subscriptions due to the bundling and presentation of Copilot as mandatory.
Index analysis
Australian consumer laws allow fines of up to AU$50 million or 30% of turnover per offense. The case demonstrates regulatory action against large technology companies regarding AI product sales and marketing practices.
Governance controls
The litigation shows regulators scrutinizing how companies communicate subscription changes and optional features to consumers, particularly when AI tools are involved.
Classification
Sources and evidence
This record was researched and written by the Index, based on the following original reporting.