Microsoft Faces Legal Action in Australia Over Alleged Deceptive 365 Pricing Tactics Linked to AI Copilot Launch

Australia's competition watchdog has initiated legal proceedings against Microsoft, accusing the tech giant of misleading 2.7 million customers regarding subscription options during its AI Copilot integration. The Australian Competition and Consumer Commission (ACCC) claims Microsoft obscured cheaper 'Classic' plans while pushing users toward higher-priced Copilot tiers.

The controversy stems from Microsoft's October 2023 rollout, where subscribers reportedly faced a binary choice: accept price hikes for Copilot-enabled plans or cancel entirely. Reddit discussions and consumer complaints revealed the existence of hidden Classic plans, which maintained original features at lower costs but were only visible during cancellation attempts.

This case highlights growing scrutiny of tech companies' pricing strategies, particularly when tying product changes to artificial intelligence features. The ACCC's action underscores the importance of transparent communication in subscription-based services, especially when fundamental pricing structures undergo significant changes.