4 Minutes
Australia's competition regulator has filed a high-profile lawsuit against Microsoft, accusing the company of hiding a lower-cost Microsoft 365 option while pushing pricier Copilot-integrated plans. The ACCC says millions of users were effectively steered into accepting higher fees without a clear way to choose the original plan.
What the ACCC says happened
The Australian Competition and Consumer Commission alleges Microsoft communicated a choice that wasn’t the full picture. According to the ACCC, two emails and a blog post about the Microsoft 365 price rise framed the options as either accepting the new Copilot-equipped plans or cancelling the subscription. The regulator claims the cheaper "Classic" plan was not clearly promoted and was only visible if users started the cancellation process.
That pattern, the ACCC argues, amounts to a deliberate dark pattern: a design and communications tactic that nudges users toward a specific outcome by obscuring alternatives. The regulator says around 2.7 million Australian Microsoft 365 customers were affected and that it logged over 100 complaints tied to the change.
Why the Classic plan matters
For many individuals and businesses, Microsoft 365 is a day-to-day necessity. The ACCC’s central claim is that if subscribers had been given straightforward information about the Classic plan, most would have retained their original pricing and feature set. Instead, customers faced messaging that implied cancellation was the only alternative to paying more for AI-enhanced tiers.
- Allegation: Consumers were told to accept the price rise or cancel
- Hidden option: The lower-cost Classic plan appeared only during cancellation
- Scale: Roughly 2.7 million Australian accounts potentially impacted
Microsoft's response and the legal stakes
A Microsoft spokesperson confirmed the company is reviewing the ACCC’s claims and said consumer trust and transparency are priorities. Microsoft added it intends to work constructively with the regulator to ensure practices meet legal and ethical standards.
While Microsoft has not publicly mounted a detailed legal defense, consumer law experts say the ACCC’s case looks credible given the volume of complaints and the alleged use of a hidden flow to present options. The ACCC has signaled it will seek a significant penalty if the court finds the company misled consumers.
Broader implications for subscriptions and AI bundles
Beyond this lawsuit, the situation highlights growing regulatory scrutiny of subscription marketing and the bundling of AI features such as Copilot as a rationale for price increases. Regulators worldwide are paying closer attention to whether companies present new premium features transparently and whether legacy plans remain a clear, accessible choice.
For customers, the case is a reminder to check vendor account pages directly, not rely solely on emails, and to look for plan options in the subscription or cancellation flows. For businesses, it signals that opaque design choices around subscriptions could invite enforcement action.
Practical tips for concerned subscribers
If you use Microsoft 365 and want to confirm your options: log into your Microsoft account and review subscription settings, search explicitly for legacy or Classic plans in the account and cancellation pages, contact Microsoft support if you can’t find alternatives, and keep copies of communications if you later decide to file a complaint with consumer authorities.
As the case moves through the Australian courts, it will be closely watched by customers, competitors, and regulators. The outcome could reshape how software providers present upgrades and price changes, especially when new AI features are used to justify higher costs.
Source: neowin
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