Microsoft Australia apologises for its misleading pricing on M365 subscriptions

The tech giant is offering refunds to those customers affected.

Microsoft Australia has issued an apology to its users after it mislead its customers over Microsoft 365 pricing.

This apology comes a week after the ACCC launched its court case against the tech giant.

The consumer watchdog alledged that Microsoft Australia mislead nearly 2.7 million Aussie customers when communicating subscription options and price increases, after it integrated its AI assistant, Copilot, into Microsoft 365 plans.

In a statement, Microsoft Australia said it began to reach out to its Microsoft 365 Personal and Family subscribers in Australia.

The company said it “could have communicated more clearly when we changed our pricing in October 2024”.

“In response to the demand for advanced AI tools, we introduced AI capabilities into the Microsoft 365 Personal and Family subscriptions that we offer in Australia,” the company stated.

Microsoft Australia said in hindsight, they could have been clearer about the availability of a non-AI enabled offering with subscribers, not just to those who opted to cancel their subscription.

“In our email to subscribers, we expressed our regret for not being clearer about our subscription options, shared details about lower-priced alternatives that come without AI and offered a refund to eligible subscribers who wish to switch,” the tech giant said.

“We have been present in Australia for more than 40 years, operating on the principles of trust and transparency. We fell short of our standards here, and we apologise. We will learn from this and improve.”

The company will be offering those affected customers two choices to stay on the current personal or family plan or switch to Microsoft 365 classic and receive a refund.

In its case against Microsoft Australia, the ACCC argued that since October 31 2024, Microsoft told subscribers of Microsoft 365 Personal and Family plans with auto-renewal enabled that to maintain their subscription they must accept the integration of Copilot and pay higher prices for their plan, or, alternatively, cancel their subscription.

The commission alleged that this information provided to subscribers was false or misleading because there was an undisclosed third option, the Microsoft 365 Personal or Family Classic plans, which allowed subscribers to retain the features of their existing plan, without Copilot, at the previous lower price.