Microsoft has apologised and offered refunds to millions of Australians allegedly duped into sticking with pricier subscriptions featuring access to its Copilot AI tool.
The Australian Competition and Consumer Commission watchdog launched legal action last week, alleging the tech giant had concealed a cheaper non-AI plan in customer communications since October last year.
The ACCC argues around 2.7 million customers would have abandoned their Microsoft 365 Personal and Family plans — which are now up to 45 per cent more expensive after steep price increases — if properly informed about the cheaper option.
“We’re concerned that Microsoft’s communications denied its customers the opportunity to make informed decisions about their subscription options…” ACCC chair Gina Cass-Gottlieb said last week.
On Thursday, Microsoft began contacting affected customers to apologise and offer refunds to those wishing to switch, acknowledging that it “could have communicated more clearly when we changed our pricing”.
“In hindsight, we could have been clearer about the availability of a non-AI enabled offering with subscribers, not just to those who opted to cancel their subscription,” Microsoft said in a blog post.
“We have been present in Australia for more than 40 years, operating on the principles of trust and transparency. We fell short of our standards here, and we apologise.”
The email to subscribers shares details about the cheaper ‘Classic plan’, which the ACCC alleges was previously concealed until a subscriber began the process of cancelling their existing subscription.
Subscribers that opt to switch to the Classic plan before the end of the year will be refunded the “difference in price between plans, starting from your first renewal date after 30 November 2024” to their Microsoft accounts.
The apology and offer of a refund could accelerate the ACCC case in the Federal Court. The regulator is seeking orders, including penalties, injunctions, declarations, consumer redress and costs.
Microsoft is the latest tech giant to be dragged before the courts this year for alleged breaches of consumer law. In August, Google agreed to a $55 million fine for reaching secret deals with Telstra and Optus to exclusively preinstall its search engine on Android devices they sold.
Corporations face face a maximum penalty of whatever is greater: $50 million, three times the value of the benefit obtained, or 30 per cent of the company’s annual turnover during the period in question.
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