ACCC Sues Microsoft Australia, U.S. Parent Over Copilot Hikes

Australia’s Competition and Consumer Commission has sued Microsoft Australia and its U.S. parent, alleging the company misled about 2.7 million Microsoft 365 Personal and Family subscribers by failing to disclose a cheaper “Classic” plan when it integrated Copilot and raised annual prices. The ACCC says Copilot’s inclusion drove annual Personal plan prices up about 45% to A$159 and Family plans up about 29% to A$179, and that customers were presented only with the choices of accepting Copilot and higher fees or cancelling while the Classic option appeared only deep in the cancellation flow. The regulator is seeking penalties, consumer redress, injunctions and legal costs and says it will pursue fines intended to deter non‑compliance with Australian consumer law, citing maximums including A$50 million per breach or other statutory calculations. Microsoft said it is reviewing the ACCC’s claim and reiterated that consumer trust and transparency are priorities. The lawsuit follows broader scrutiny of Microsoft’s bundling practices and has raised procurement implications as enterprise buyers and CIOs push for AI‑transparency clauses to guard against forced upgrades and price shocks.