he Australian Competition and Consumer Commission’s lawsuit centres on Microsoft’s decision to integrate its Copilot AI assistant into its Microsoft 365 Personal and Family subscription plans in Australia, a move accompanied by a significant price increase.

The ACCC alleges that Microsoft informed customers they must either accept the higher-priced, AI-integrated plan or cancel their subscription entirely, while deliberately omitting a crucial third option. This undisclosed option was the “Classic” plan, which allowed subscribers to retain their core Microsoft 365 apps at the previous, lower price point without the Copilot integration.

The ACCC claims that this omission was a deliberate tactic to increase the number of consumers on the more expensive plans, with the annual price of the Microsoft 365 Personal plan jumping by 45 per cent, from $109 to $159, and the Family plan increasing 29 per cent, from $139 to $179.