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Investing.com -- Australia’s consumer watchdog has sued Microsoft, claiming the tech giant misled 2.7 million customers by making it difficult to avoid paying for new artificial intelligence services.
The Australian Competition and Consumer Commission (ACCC) filed a case Monday in Federal Court alleging Microsoft failed to clearly inform existing Microsoft 365 subscribers how to opt out of paying for Copilot AI tools during subscription renewals.
According to the ACCC, Microsoft told users over the past year that their subscription fees would increase to include Copilot.
While Microsoft’s communications mentioned customers could cancel their subscriptions, the ACCC claims the company only revealed another option - declining Copilot to avoid the added cost while keeping the subscription - after users had already started the cancellation process.
The watchdog argues this lack of pricing transparency violates Australian consumer law. The ACCC is seeking fines and refunds for affected customers. Companies can face penalties of up to 50 million Australian dollars (US$32.6 million) for each violation.
"Microsoft deliberately omitted reference to the classic plans in its communications and concealed their existence until after subscribers initiated the cancellation process, to increase the number of consumers on more expensive Copilot-integrated plans," said ACCC Chair Gina Cass-Gottlieb.
She added that many users wouldn’t have started cancellation because Microsoft Office apps included in 365 are essential for households and businesses.
The ACCC noted that the annual price of a Microsoft 365 Personal plan increased 45% to A$159 after Copilot was added, while a family plan rose 29% to A$179.
Microsoft stated it is reviewing the allegations, adding: "Consumer trust and transparency are top priorities for Microsoft. We remain committed to working constructively with the regulator and ensuring our practices meet all legal and ethical standards."
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