The Australian Competition and Consumer Commission (ACCC) has brought a grand suit against Microsoft, claiming that the company has duped millions of customers after increasing prices of its Microsoft 365 subscription packages, which include the new AI tool, Copilot.
The regulator alleges that the tech giant was unable to explicitly state that users could still use the older and cheaper plans without the AI feature.
What Led to the Lawsuit
The ACCC states that approximately 2.7 million Australian customers with Microsoft 365 Personal and Family plans were impacted by the changes.
In the case of Microsoft launched Copilot, the costs of the Personal plan and the Family plan have increased by 45 and 29 percent, respectively.
The problem, as stipulated in the lawsuit, is not only an increment in the price but also its manner of informing customers about it.
According to the allegation by the ACCC, Microsoft presented customers with just two apparent options, either to stay with the new, more expensive plans that now had Copilot or to cease subscriptions.
Nevertheless, the third option was available, to remain on the older copilot free and Classic plan, which was not explicitly revealed to customers.
This option was actually known to many customers who were supposed to have been fully and fairly informed but were not on the progression of taking the cancellation process and not having to be alerted about this before being told to pay higher prices.
The regulator states that the actions of the Microsoft company were deceptive and misleading, which was against the Australian Consumer Law.
This might not have made the customers spend more than required initially because the company did not explain to the customers all the choices they would require making to make them believe that they needed to upgrade before they could use the service.
Response and Potential Impact of Microsoft
Microsoft has also admitted that it is aware of the case and it is investigating the claims.
The company has already declared that it is still determined to be transparent and ensure customer confidence and has not as yet come out with an elaborate statement with respect to the allegations.
Should the court conclude that Microsoft violated consumer law, the firm might be faced with some of the hefty punishments, such as huge fines and potential restitution to victims.
The ACCC is also claiming financial fines as well as refunds to the users who paid more because of the ambiguous pricing mechanism.
The case underscores emerging fears across the world regarding the mechanism through which large tech firms incorporate AI into their routine products and services.
Although technologies such as Microsoft Copilot add to AI and are aimed at improving productivity, also due to their introduction, concerns have arisen regarding the cost expenses and transparency in communication.
To the consumers, the question is more than about rising prices, it is all about justice and making choices.
One view put forward by regulators is that companies need to be transparent about all options available and make sure that customers can easily comprehend what they are getting.
Moving forward in the case, specialists assume that it will be a good precedent in terms of the way technological firms will introduce and price AI related services in subscription-based products.
The result of this case is one that will be keenly followed not only within Australia but throughout the technological industry world over because regulators and consumers want large corporations to be very transparent and honest.
