ACCC Sues Microsoft Over Misleading 365 Plan Options

Australia's ACCC Takes Microsoft to Court for Misleading 365 Subscribers

Written by Aaron S.,

Editor-In-Chief

Last Updated: October 27, 2025

Key Takeaways

The ACCC claims Microsoft misled 2.7 million Australians when adding its AI Copilot to Microsoft 365 with a higher subscription price;
Regulators say Microsoft hid cheaper "Classic" plans, which users could only find after starting to cancel their subscriptions;
The ACCC began investigating after complaints and Reddit posts revealed the buried option for older, lower-cost Microsoft 365 plans.

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Microsoft is being taken to court by Australia’s consumer regulator over how it introduced its AI tool, Copilot, into Microsoft 365 subscriptions.

The Australian Competition and Consumer Commission (ACCC) claimed that the company gave misleading information to users when it rolled out the feature with a price increase.

The ACCC stated that around 2.7 million users were told they had two choices: accept the updated Microsoft 365 plans, which included Copilot and came with higher costs, or cancel their subscriptions.

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However, the regulator argued that this was not the whole picture. A third option, known as the "Classic" plan, offered the original service without Copilot at an earlier, lower price.

Instead, people had to go through several steps in their accounts to find the Classic plans. They had to begin the cancellation process before being shown the option to switch to the cheaper version.

The alleged conduct took place after Microsoft updated its personal and family 365 plans on October 31, 2024. The ACCC said it began investigating after receiving customer reports and noticing discussions on Reddit in which users shared how to find the hidden Classic option.

In a public statement, ACCC Chair Gina Cass-Gottlieb said that Microsoft left out important details and did not tell subscribers about all their choices upfront.

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