Archive · 9 Nov 2025
Microsoft Apologizes to Australians, Offers Refunds Over AI Price Hike Amidst Legal Action
Microsoft, a big computer software company, is saying sorry to many people in Australia.
They made their Microsoft 365 programs more expensive by adding a new AI helper called Copilot.
Some customers felt Microsoft didn't explain things clearly and that it was hard to find the older, cheaper versions without the AI.
Now, Microsoft is offering money back to those who want to switch back to the cheaper plans before 2025 ends.
At the same time, a consumer watchdog in Australia is suing Microsoft because they believe the company wasn't honest about the prices and choices.
If Microsoft is found to have misled customers, they could have to pay a lot of money.
Microsoft is offering refunds to 2.7 million Australian customers who subscribed to AI-integrated Microsoft 365 plans.
The company apologized for a lack of clarity in its pricing and subscription options for AI add-ons.
The Australian Competition and Consumer Commission (ACCC) has initiated legal action against Microsoft, alleging misleading conduct.
The ACCC claims Microsoft misled consumers about the availability of cheaper plans that do not include AI tools.
Eligible customers switching back to non-AI plans before the end of 2025 will receive refunds dating back to November 30, 2024.
- Who
- Microsoft and the Australian Competition and Consumer Commission (ACCC)
- What
- Microsoft is offering refunds and apologizing to 2.7 million Australian customers for a lack of clarity and alleged misleading conduct regarding price increases for AI-integrated Microsoft 365 subscriptions, amidst legal action by the ACCC.
- When
- Microsoft emailed the offer to subscribers on Thursday; refunds are available until the end of 2025 for payments made after November 30, 2024; ACCC launched legal action 10 days prior to the email.
- Where
- Australia
- Why
- Allegations of misleading consumers about subscription prices, the availability of cheaper plans without AI tools, and a lack of transparency regarding AI add-ons.
Microsoft's Stance
ACCC's Allegations
Clarity on Subscription Options
Microsoft's Stance
Microsoft acknowledges a lack of clarity in its pricing structure and plans for AI tools, apologizing for falling short of trust and transparency standards.
ACCC's Allegations
The ACCC alleges Microsoft misled consumers about the availability of cheaper plans without AI tools and subscription prices, denying customers informed decisions.
Information on Cheaper Alternatives
Microsoft's Stance
Microsoft is offering refunds to eligible subscribers who wish to switch back to lower-priced alternatives without AI, admitting they could have been clearer about these options.
ACCC's Allegations
The ACCC claims customers were not adequately advised about cheaper non-AI alternatives and were only informed about them when attempting to cancel their subscriptions.
Customer Communication
Microsoft's Stance
Microsoft expresses regret for not being clearer about subscription options and is emailing subscribers with details about lower-priced alternatives and refund offers.
ACCC's Allegations
The ACCC is concerned that Microsoft's communications prevented customers from making informed choices about their subscriptions.
- Company
- Microsoft
- Issue
- Price increase and clarity of subscription options for Microsoft 365 with AI (Copilot)
- Affected Customers
- Approximately 2.7 million Australians
- Refund Offer
- Available for subscribers switching back to non-AI plans before the end of 2025
- Refund Payout
- Datings back to payments made after November 30, 2024
- Legal Action
- Australian Competition and Consumer Commission (ACCC) in federal court
- Potential Penalties
- $50 million fine, three times the value of the misleading act, or 30% of adjusted turnover
