The Australian Competition and Consumer Commission (ACCC) has initiated proceedings in the Federal Court against Microsoft Australia Pty Ltd and its parent company, Microsoft Corporation, alleging that millions of Australian consumers were misled about their options following the integration of the company’s AI assistant into Microsoft 365 subscription plans.
The regulator claims that Microsoft failed to disclose an alternative subscription option, known as the “Classic” version of Microsoft 365 Personal or Family, which allowed customers to retain their existing features without Copilot and at the previous lower price. The ACCC alleges that Microsoft did not mention this Classic plan in its customer communications, and that the only way users could discover it was by starting the cancellation process.
From 31 October 2024, Microsoft increased the annual subscription price of Microsoft 365 Personal from AUD 109 to AUD 159, and Microsoft 365 Family from AUD 139 to AUD 179.
ACCC Chair Gina Cass-Gottlieb said the Commission will allege that Microsoft deliberately omitted reference to the Classic plan in its messaging, effectively steering more consumers toward the more expensive, AI-integrated subscriptions. She noted that Microsoft Office applications are essential to many people’s work and personal lives, making the decision to cancel particularly difficult.
The ACCC contends that subscribers were denied the opportunity to make informed choices, and that many would have opted to remain on the Classic plan had they known it was available. The Commission is seeking a range of remedies from the Court, including penalties, injunctions, declarations, consumer redress, and costs.
For current subscribers who have not renewed their plan since July 2025, the ACCC advised that it may still be possible to revert to the Classic plan by starting the cancellation process and selecting that option during renewal. However, pricing and plan availability remain subject to Microsoft’s discretion.
This enforcement action reflects the ACCC’s broader focus on digital markets, competition, and consumer protection in the technology sector. As digital services increasingly integrate AI features and subscription-based pricing, transparency and informed consent have become key compliance considerations for both providers and consumers.
For Australia’s cyber and technology community, the case highlights the growing overlap between digital rights, fair trading, and data-driven product models — especially as AI becomes a core component of enterprise software offerings.
