- Microsoft faces Australian lawsuit over unfair software pricing
- ACCC lawsuit alleges Microsoft 365 users were not informed of cheaper options
- Up to 2.7 million users could be affected
Microsoft is being sued by Austria’s consumer watchdog for allegedly misleading millions of users about its Microsoft 365 platform.
The Australian Competition and Consumer Commission (ACCC) says the company recommended users comply with an automatic renewal agreement on its Microsoft 365 package, even though cheaper or more useful offers are available.
Up to 2.7 million users of the Microsoft 365 Personal and Family plans could have been affected and could now receive a portion of the payment if the case is successful.
Microsoft 365 pricing lawsuit
The ACCC complaint alleges that Microsoft failed to provide adequate advice to users after adding its Copilot AI platform to the 365 platform in Australia in October 2024.
Users with a Microsoft 365 Personal or Family plan were allegedly told that this Copilot integration would mean they would have to pay a higher price if they wanted to keep their existing subscription.
However, in its complaint, the ACCC says Microsoft provided users with “false or misleading” information, because there was an undisclosed third option: Microsoft 365 Personal or Family Classic plans, which allowed subscribers to keep the features of their existing plan, without Copilot, at the previous lower price.
The ACCC notes that the company sent two emails and published a blog post informing auto-renewal subscribers about the new integration, 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 began the process of canceling their subscription.
The complaint notes that these were not small price increases either, with the annual subscription price of the Microsoft 365 Personal plan increasing 45% from AU$109 to AU$159, and the Microsoft 365 Family plan increasing 29% from AU$139 to AU$179.
“The Microsoft Office applications included in 365 subscriptions are essential to many people’s lives and, as there are limited substitutes for the included package, canceling the subscription is a decision that many would not make lightly,” said ACCC President Gina Cass-Gottlieb.
“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 plan without Copilot and at a lower price,” Cass-Gottlieb said.
“We believe many Microsoft 365 customers would have opted for the Classic plan if they had known all the options available.”
The ACCC says it is seeking orders “including penalties, injunctions, declarations, consumer compensation and costs”, noting that the maximum fine for each breach of the Australian Consumer Law is more than $50 million, meaning Microsoft could face a costly payout if the case is successful.
TechRadar Pro has contacted Microsoft for comment.
The company also faces a multi-billion pound legal claim in the UK for 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.
