Microsoft Faces ACCC Lawsuit Over Alleged Misleading Conduct on AI-Integrated Microsoft 365 Plans

Australia’s competition regulator, the Australian Competition and Consumer Commission (ACCC), has filed a lawsuit against Microsoft Australia and its parent company, Microsoft Corp, accusing them of misleading about 2.7 million Australian customers. The ACCC alleges that Microsoft provided deceptive information regarding subscription options and pricing changes after integrating its artificial intelligence assistant, Copilot, into Microsoft 365 plans.

According to the ACCC, the tech giant failed to clearly inform customers about how the Copilot integration would impact their existing subscriptions, particularly regarding automatic upgrades and price increases. The regulator claims many users were led to believe they had to accept the new AI-enabled plans or risk losing access to essential Microsoft 365 services, such as Word, Excel, PowerPoint, and Outlook.

The legal action highlights growing global scrutiny of major tech companies as they increasingly embed AI tools into paid software services. The ACCC contends that Microsoft’s actions breached Australian consumer law by engaging in false or misleading representations, potentially leading customers to pay more without fully understanding the implications of the changes.

If proven, the lawsuit could result in substantial penalties and reinforce the regulator’s stance on protecting consumers from deceptive digital practices. The ACCC has emphasized that transparency and fair communication are crucial as companies like Microsoft expand their AI-driven offerings in Australia.

Microsoft has not yet issued a formal response to the allegations. The case underscores ongoing tensions between regulators and global technology firms over the rollout of artificial intelligence features within subscription-based products — a space where pricing, consent, and clarity are increasingly under the spotlight.