The tech giant has been forced to apologize to its 2.7 million Australian users after the country’s competition regulator filed a lawsuit against the company. Microsoft admitted that it did not clearly inform about the availability of cheaper plans without AI functions.
An official apology in response to the giant’s mistake
Microsoft sent a formal apology to its Australian subscribers on Thursday, while also offering refunds. The case involves allegations of intentionally hiding cheaper subscription options while introducing expensive packages with artificial intelligence features.
The apology came ten days after the Australian Competition and Consumer Commission (ACCC) filed a lawsuit against Microsoft. Last October, the company integrated its Copilot AI assistant into its Microsoft 365 Personal and Family plans, while also increasing prices.
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Lack of transparency in communication
Microsoft confirmed in its statement that it has introduced AI capabilities to Microsoft 365 subscriptions in response to customer demand for advanced artificial intelligence tools. At the same time, he admitted that he “could have been clearer” about the availability of the offer without AI.
Our relationship with clients is based on trust and transparency. We apologize for failing to meet our standards
– Microsoft wrote in a message to subscribers.
The company presented users with two options: stay with its current AI plan at $10-12 per month or upgrade to Microsoft 365 Classic for $7-9 per month without Copilot.
Refunds solve the problem
Customers who decide to upgrade to the Classic plan by the end of the year will receive a refund of the price difference retroactively from November 30, 2024 – that is, from the moment of the first subscription renewal after the price changes.
In its lawsuit, the ACCC alleged that Microsoft deliberately omitted information about cheaper “Classic” plans, which retained original features without Copilot at existing prices. The regulator is demanding financial penalties, court orders, compensation for consumers and reimbursement of the costs of the proceedings.
A lesson for the entire technology industry
As Joni Pirovich, founder and CEO of the Crystal aOS operating system, said:
Companies should clearly separate AI and non-AI pricing plans at launch and outline the pros and cons of each so consumers can make more informed decisions
Pirovich added that price should not be an arbitrary discriminatory factor in access to AI, which can truly benefit consumers.
Australian subscribers who want to stay on Microsoft 365 plans with AI features do not need to take any action. People upgrading to the Classic plan must keep automatic renewal turned on to maintain access to services.
The company stated:
We have been present in Australia for over 40 years, operating according to the principles of trust and transparency. We will learn from this situation and improve
The Microsoft case highlights the growing challenges of integrating artificial intelligence into consumer products and the need for transparent pricing communication in the AI era.
