On October 27, 2025, the Australian Competition and Consumer Commission (ACCC) filed Federal Court proceedings against Microsoft Corporation and Microsoft Pty Ltd, alleging that they engaged in misleading or deceptive conduct under the Australian Consumer Law.

The ACCC claims Microsoft told auto-renewing Microsoft 365 Personal and Family subscribers they must either accept Copilot integration at a higher price or cancel, while omitting a third choice: switch to a Classic plan (no Copilot) at the old price, accessible only late in the cancellation flow. ACCC materials and pleadings cite price changes effective on renewal after October 31, 2024:

• Personal annual A$109 → A$159
• Family annual A$139 → A$179.

The Commission says Microsoft communicated the changes via two emails and a blog post, none of which mentioned the Classic option. The initiating document pleads breaches of s 18 and s 29(1)(i), (l), (m) of the ACL.

The ACCC seeks penalties, consumer redress, injunctions, declarations, and costs. Under the ACL, the maximum corporate penalty per breach is the greater of A$50 million, three times the benefit obtained, or 30% of adjusted turnover if the benefit cannot be determined. Microsoft has said it is reviewing the claims.

INSIDER TAKE

This case squarely targets subscription transparency in plan migrations and feature bundling. The risk isn’t the price rise itself; it’s how options are presented.

For operators:

• Present all available options (upgrade, downgrade/legacy, cancel) upfront, not only within cancellation.
• Treat AI add-ons and major feature changes as material: explain value, price delta, and consent clearly.
• Audit renewal emails, in-product notices, landing pages, and cancellation flows for omissions that could imply false binaries.
• Expect convergence with other regulatory frameworks scrutinizing “dark patterns” and negative-option practices, even outside Australia (e.g., U.S. and EU enforcement trends).

If the ACCC prevails, expect higher global disclosure standards at renewal, especially when bundling AI features into consumer plans.