Microsoft Australia Apologises, Offers Refunds to Millions of Subscribers After ACCC Legal Action
Friday 07 November,2025
News Aggregator -This article generated and compiled with assistance of Google Gemini AI/Fact checking A.Ritenis
SYDNEY — Microsoft Australia has initiated a comprehensive refund program for millions of Australian customers after the tech giant was taken to Federal Court by the Australian Competition and Consumer Commission (ACCC) for allegedly misleading subscribers about their options following a major price increase.
The company has apologised, admitting it “fell short of our standards” by failing to clearly inform customers of a cheaper, non-AI-integrated subscription option when introducing its Copilot artificial intelligence feature.
The Allegation: Concealing Cheaper ‘Classic’ Plans
The ACCC launched legal proceedings against Microsoft Australia and its US parent company in late October 2025, alleging that approximately 2.7 million Australian subscribers of Microsoft 365 Personal and Family plans were misled.
- The Price Hike: Following the integration of the new AI assistant, Copilot, the annual price for the Microsoft 365 Personal plan surged by a reported 45% (from $109 to $159), and the Family plan by 29% (from $139 to $179).
- Misleading Communications: The ACCC alleged that Microsoft’s communications only presented customers with two choices upon renewal: accept the more expensive, AI-enhanced plan, or cancel their subscription entirely.
- The Hidden Option: The ACCC claimed Microsoft deliberately concealed an “undisclosed third option”—the Microsoft 365 Personal or Family Classic plans. These plans retained the original features without Copilot and at the original, lower price, but were only visible to subscribers who initiated the cancellation process.
ACCC Chair Gina Cass-Gottlieb stated that Microsoft’s conduct denied consumers the opportunity to make informed decisions about their subscription, potentially steering them into paying higher prices for features they did not want or need.
The Resolution: Apology and Full Reimbursement
“In a swift move to address the regulatory action, Microsoft Australia has begun emailing affected customers, issuing an apology and detailing the steps for a refund.”In hindsight, we 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,” the company stated in its communication.”
Key Details for Affected Subscribers:
- Eligibility: Subscribers who were automatically renewed into the higher-priced Microsoft 365 Personal or Family plans after November 30, 2024, are eligible.
- Action Required: Customers must switch to the Microsoft 365 Personal or Family Classic plan by December 31, 2025.
- Refund Details: Eligible customers who switch will receive a refund covering the price difference between the more expensive AI-integrated plan and the Classic plan, dating back to their first renewal after November 30, 2024.
- Processing: The refund will be processed within 30 days of switching plans and credited to the original payment method.
While the consumer redress is now being offered, the ACCC’s legal action in the Federal Court is still seeking financial penalties and injunctions against the technology giant, with potential maximum penalties reaching the greater of $50 million, three times the benefit obtained, or 30% of turnover during the breach period. The move by Microsoft to offer refunds is seen as a significant step to mitigate the potential financial fallout and restore customer trust.
Would you like me to find out more details about how to switch to the Microsoft 365 Classic plan and claim a refund?
