Australia’s consumer watchdog is taking Microsoft to court over “allegedly misleading approximately 2.7 million Australian customers” by not clearly communicating all personal and family Microsoft 365 plan options after introducing Copilot AI features.
As part of its Federal Court proceedings, the Australian Competition and Consumer Commission (ACCC) alleges that Microsoft misled customers into paying more for a 365 subscription by not clearly disclosing all options. Earlier in the year, the price of an individual annual Microsoft 365 subscription increased from $109 to $159 — more than a 45 per cent increase.
However, customers could retain a $109 annual subscription without Copilot features, called “Microsoft 365 Personal Classic”, by attempting to cancel their subscription. The ACCC alleges that this was misleading because the cheaper plan was not communicated to subscribers.
“Following a detailed investigation, we will allege in Court that Microsoft deliberately omitted reference to the Classic plans in its communications and concealed their existence until after subscribers initiated the cancellation process to increase the number of consumers on more expensive Copilot-integrated plans,” ACCC Chair Gina Cass-Gottlieb said.
“We believe many Microsoft 365 customers would have opted for the Classic plan had they been aware of all the available options.”
Before the price increase, Microsoft published a blog and sent an email to existing subscribers, which included the company’s justification for the change. Part of adjusting subscription prices was to “ensure Microsoft customers are among the first to access powerful AI features”.
The move drew significant backlash from users, including a prominent discussion on the r/Australia subreddit. As part of the ACCC’s investigation, it referred to Reddit as one of its sources, in addition to “a significant number of consumer reports” filed with the consumer watchdog.
The ACCC’s allegations coincide with Microsoft’s latest Copilot update, which added a mascot to its chatbot.
The post ACCC takes Microsoft to court over pricier Copilot 365 plans appeared first on GadgetGuy.
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