Price shock for Microsoft 365 with Copilot: Australian authority files lawsuit
After Microsoft significantly raised prices for Office subscriptions after integrating Copilot AI and failed to provide an alternative, a lawsuit was filed.
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Australia's consumer protection authority has filed a lawsuit against Microsoft because the company drastically increased the subscription prices for Microsoft 365 for private customers and largely concealed the possibility of maintaining the old prices. This was announced by the Australian Competition and Consumer Commission (ACCC), stating that approximately 2.7 million people in the country were affected by the move made about a year ago. Their authority fears that Microsoft's actions have denied many of them the opportunity to make an informed decision, says ACCC Chair Gina Cass-Gottlieb: “We believe many Microsoft 365 customers would have chosen the Classic option if they had known all the available options.”
As the ACCC recalls the filing of the lawsuit, since last October in Australia, Microsoft has led customers to believe that they had to accept the integration of the AI technology Copilot and the associated price increases. However, this meant a price increase of 30 percent. The AI company did not mention that there was also an option to subscribe to the programs at the same price without the AI add-on. To achieve this, one first had to start the subscription cancellation process before the so-called Classic options could be selected. Because Microsoft's Office programs are essential in many people's lives, this path through the supposed cancellation is extremely off-putting.
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Microsoft's notifications about the new price tiers were false or misleading, as they gave the impression that there was no alternative to the more expensive options with AI integration. However, companies must disseminate correct information about their offers and prices. The authority is seeking penalties, injunctions, consumer compensation, and cost reimbursement in court. Microsoft itself has assured Australian news outlet ABC that it intends to review the ACCC's allegations. It feels obligated to cooperate constructively with the authority and adhere to legal requirements and ethical standards.
(mho)
