Microsoft Apologizes to 2.7 Million Australian Users for Misleading AI Subscription Plans

Tech giant Microsoft is making headlines once again. The company has publicly apologized to over 2.7 million customers in Australia. The matter relates to subscription plans for Microsoft 365 that recently added the AI ​​feature Copilot.

The Australian Competition and Consumer Commission has charged Microsoft with misleading consumers during the renewal of subscriptions. The Commission said the company, from October 31, 2024, told users they would either have to accept the new AI-enabled plans or cancel their subscriptions.

These new plans had much higher prices than before. Microsoft 365 Personal Plan jumped 45% from AUD 109 to AUD 159, while the price for the Family Plan increased by 29%, from AUD 139 to AUD 179. However, the ACCC says that Microsoft did not inform users that they could continue with the old Classic plan without AI, which remained priced the same. This option only became available when a customer initiated the cancellation process.

The company admitted its mistake and said it failed to communicate more clearly with customers. Microsoft Australia issued a statement saying that it had sent emails to users apologizing for not providing clear information about the subscription options. The company said that users had been informed of the non-AI options and that refunds had been initiated for eligible customers. Microsoft also said that it would improve transparency and communication in the future to avoid customer misunderstandings.

The ACCC has filed a case against Microsoft in the Federal Court. The Commission is preparing to impose a number of strict measures against the company, including financial penalties, consumer refunds, and legal costs. The Commission states that tech companies should not mislead consumers by promoting new technology or adding AI features.