Australia sues Microsoft for illegal practices

The Australian Competition Authority announced that it is taking legal action against Microsoft for a deceptive offer involving the Copilot artificial intelligence assistant.

The tech giant is accused of providing false information to 2.7 million Australians who subscribed to Microsoft 365 via automatic renewal.

The company presented customers with two options: pay more for an offer that included Copilot, or cancel their subscriptions.

There was a third option, but it only appeared when the subscriber initiated the cancellation process. This option offered the possibility of keeping a so-called “Classic” offer, without Copilot and at the original price, the competition authority said in a press release.

Copilot is an artificial intelligence-powered assistant that helps users with text-based searches and tasks.

The lawsuit was filed in the Federal Court against Microsoft Australia and Microsoft Corp.

" We will sue Microsoft for deliberately not mentioning the 'Classic' plans in their communications and hiding the existence of this option until subscribers began the cancellation process, in order to increase the number of customers for the more expensive plans that include Copilot ," said the regulator's executive director, Gina Cass-Gottlieb.

" The Microsoft Office applications included in 365 subscriptions are essential to many people's lives, and canceling a subscription is not an easy decision ," she added.

The competition authority accuses Microsoft of engaging in such practices since October 31, 2024, explaining that subscriptions with Copilot are 29 to 45% more expensive than those without it.

The US tech giant could face a fine of $30 million (26 million euros) or more for each violation. 

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