Forced AI Upgrade: Australia Sues Microsoft Over Hidden 365 Fees
Microsoft has become the defendant in a lawsuit filed by the Australian Competition and Consumer Commission (ACCC), which accuses the company of misleading millions of users by effectively forcing them to migrate to more expensive Microsoft 365 plans integrated with Copilot AI, without offering an option to decline the new feature.
In Australia, subscription prices reportedly rose by nearly 45%, while users were not provided with a Copilot-free alternative. According to the ACCC, Microsoft concealed the existence of cheaper plans and failed to mention them in emails or notifications. Information about retaining the previous pricing was available only on the cancellation screen—a point at which most users had already decided to renew.
The price increase affected approximately 2.7 million subscribers, raising the annual cost from A$109 to A$159 (roughly US$72 to US$104). Should the court rule against Microsoft, the company could face a fine of up to A$50 million (around US$33 million).
ACCC Chair Gina Cass-Gottlieb stated that the company had deliberately withheld information about legacy plans to drive users toward more expensive, AI-enabled subscriptions. The Commission has demanded that Microsoft refund overcharged customers and ensure greater transparency in future communications.
In response, Microsoft affirmed that it “values user trust and transparency” and intends to cooperate with regulators. The case marks one of the first instances in which a major technology corporation has been accused of coercively integrating artificial intelligence features in a manner that directly impacts subscription costs for millions of consumers.
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