Microsoft faces legal challenge in Australia over alleged pricing deception tied to its Copilot AI tools, as the country’s competition regulator accuses the tech firm of misleading millions of users. The case raises questions about transparency in AI-related subscription models, which are becoming central to Big Tech’s growth strategies, reports The WP Times, citing Investing.com.
The Australian Competition and Consumer Commission (ACCC) filed its lawsuit on Monday in the Federal Court, alleging that Microsoft failed to clearly inform 2.7 million Microsoft 365 subscribers how to avoid being charged for its new Copilot services during renewal.
According to the ACCC, customers were told their fees would automatically rise to include Copilot — a suite of AI features embedded in Office applications. While users were informed they could cancel subscriptions, Microsoft allegedly disclosed the option to decline Copilot (and thus avoid higher costs) only after customers initiated the cancellation process.
Regulators argue this lack of pricing clarity breaches Australian consumer law. Under local legislation, companies can face penalties of up to A$50 million (£26 million) per violation.
ACCC Chair Gina Cass-Gottlieb said Microsoft “deliberately omitted reference to its classic, lower-priced plans to increase the number of consumers moved onto Copilot-integrated tiers.” She noted that many users were reluctant to cancel, given Microsoft 365’s importance for both households and small businesses.
The annual cost of a Microsoft 365 Personal plan reportedly jumped 45% to A$159, while a Family plan rose 29% to A$179 after the Copilot rollout.
In response, Microsoft said it is “reviewing the allegations” and remains “committed to transparency and compliance with all legal standards.”
The case marks one of the first global regulatory tests over AI pricing practices, reflecting growing scrutiny of how tech giants integrate and monetise artificial intelligence within existing products.
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