Australia’s competitors regulator on Monday sued Microsoft, accusing it of deceptive hundreds of thousands of consumers into paying larger costs for its Microsoft 365 software program after bundling it with the artificial intelligence tool Copilot.
The Australian Competitors and Shopper Fee (ACCC) alleged that from October 2024, the expertise big misled about 2.7 million prospects by suggesting they needed to transfer to higher-priced Microsoft 365 private and household plans that included Copilot.
After the mixing of Copilot, the annual subscription value of the Microsoft 365 private plan elevated by 45 per cent to A$159 (US$103.32) and the worth of the household plan elevated by 29 per cent to A$179, the ACCC mentioned.
The regulator mentioned Microsoft failed to obviously inform customers {that a} cheaper “basic” plan with out Copilot was nonetheless accessible.
The watchdog mentioned the choice to maintain the cheaper plan was solely revealed after customers started the cancellation course of, a design it argued breached Australian shopper legislation by failing to reveal materials info and making a misunderstanding of accessible decisions.
Microsoft’s earlier communications via emails and a weblog publish failed to say the cheaper various, solely informing prospects that the worth improve would apply on the subsequent auto-renewal, the ACCC mentioned.
A Microsoft spokesperson mentioned in an emailed response that it was reviewing the ACCC’s declare intimately.
The ACCC is in search of penalties, shopper redress, injunctions and prices from Microsoft Australia Pty Ltd and its US guardian, Microsoft Corp.
The ACCC mentioned the utmost penalty that may very well be imposed on an organization for every breach of Australian shopper legislation was the better of A$50 million, thrice the advantages obtained that have been moderately attributable, or 30 per cent of the company’s adjusted turnover in the course of the breach interval if the worth of the advantages couldn’t be decided.
“Any penalty which may apply to this conduct is a matter for the Courtroom to find out and would rely on the Courtroom’s findings,” the regulator mentioned. “The ACCC won’t touch upon what penalties the Courtroom could impose.”
