Microsoft 365 Price Hike Sparks Lawsuit Alleging Millions Were Tricked Into Pricier AI Plans

Microsoft’s efforts to include its Copilot AI in as many of its services and products as possible has landed the company in some hot water. The Australian Competition and Consumer Commission (ACCC) is taking the company to court, accusing the software giant of misleading customers with its integration of Copilot into Microsoft 365 plans.

This court case stems from Microsoft’s decision to increase the pricing of Microsoft 365 Personal and Family plans in October of last year. Subscribers received emails notifying them of the upcoming increase in price, noting that the price hike was due to newly added benefits, such as being the “first to access powerful Al features in our apps.”


The ACCC is alleging that the company purposely made customers believe that accepting the price increase was the only option available, when customers did have another choice that didn’t come with an increase in price. The problem, as the ACCC claims, is that customers only became aware of that other option, known as the Microsoft 365 Classic Plan, after starting the cancellation process.

Because Microsoft Office is such an important piece of software for so many users, the ACCC says that “cancelling the subscription is a decision many would not make lightly.” Meaning that many likely never got a chance to see that the Classic option without Copilot was still available to them.

When Microsoft made this move last year, many users criticized it in much the same way the ACCC is in its proceedings. The government watchdog even mentions Reddit posts and other online chatter in its complaint.

If the ACCC is able to prove its case in court then Microsoft could potentially be hit with a penalty of up to $50 million Australian Dollars (~32.7 million USD).