- Microsoft faces Australian lawsuit over unfair software pricing
- ACCC case claims Microsoft 365 users were not told about cheaper options
- As many as 2.7 million users may be affected
Microsoft is being sued by the Austrian consumer watchdog for allegedly misleading millions of users regarding its Microsoft 365 platform.
The Australian Competition and Consumer Commission (ACCC) says the company advised users to stick to an automatic renewal agreement on their Microsoft 365 package, despite cheaper or more useful deals being available.
As many as 2.7 million users of Microsoft 365 Personal and Family plans could have been affected and could now receive part of a payout if the case is successful.
Microsoft 365 price lawsuit
The ACCC complaint alleges Microsoft failed to offer appropriate advice to users after adding its Copilot AI platform to the 365 platform in Australia back in October 2024.
Users with a Microsoft 365 Personal of Family plan were reportedly told that this integration of Copilot would mean they would have to pay a higher price if they wanted to keep their existing subscription.
But in its complaint, the ACCC says Microsoft gave users “false or misleading” information because there was an undisclosed third option – the Microsoft 365 Personal or Family Classic plans – which allowed subscribers to keep the features of their existing plan, without Copilot, at the previously lower price.
The ACCC notes that the company sent out two emails and published a blog post informing subscribers of the new integration’s auto-renewal, including pricing information – but apparently failed to mention that alternative plans were available and users themselves would have no way of discovering their existence unless they actively started the process of canceling their subscription.
The complaint notes that these were no small price increases either – as the annual subscription price for the Microsoft 365 Personal plan increased by 45% from AU$109 to AU$159, and the Microsoft 365 Family plan increased by 29% from AU$139 to AU$179.
“The Microsoft Office apps included in 365 subscriptions are essential to many people’s lives, and as there are limited substitutes for the bundled package, canceling the subscription is a decision that many would not take lightly,” ACCC Chair Gina Cass-Gottlieb noted.
“We are concerned that Microsoft’s communications denied its customers the opportunity to make informed decisions about their subscription options, which included the ability to keep all the features of their existing subscription without Copilot and at the lower price,” Cass-Gottlieb said.
“We believe that many Microsoft 365 customers would have chosen the Classic plan if they had been aware of all the options available.”
The ACCC says it is seeking orders “including fines, injunctions, declarations, consumer complaints and costs”, noting that the maximum penalty for each breach of the Australian Consumer Law is over $50 million, meaning Microsoft could face an expensive payout if the case is successful.
TechRadar Pro has reached out to Microsoft for comment.
The company also faces a multi-billion pound legal claim in the UK over alleged anti-competitive behavior and unfair software licensing practices, and is currently involved in a long-running dispute with ValueLicensing over the sale of used Office and Windows licenses.
