Yes. On October 27, 2025, Australia’s consumer regulator, the Australian Competition and Consumer Commission (ACCC), filed Federal Court proceedings against Microsoft Corporation and Microsoft Pty Ltd. The ACCC alleges that communications about higher Microsoft 365 prices led around 2.7 million Australian Personal and Family subscribers to think they had to accept a Copilot-linked price increase or cancel, without being told about a lower-priced no-Copilot Classic option. The Court has not determined whether Microsoft broke the law.
What the ACCC says Microsoft did
The ACCC’s case is not simply that Microsoft raised subscription prices. Its central allegation is that Microsoft presented existing subscribers with an incomplete picture of their choices: pay more for Microsoft 365 with Copilot, or cancel. The regulator says subscribers could instead move to a lower-priced Personal Classic or Family Classic plan without Copilot and keep the existing core features, but that option was not disclosed in the key communications.
The ACCC says Microsoft Corporation prepared and published the communications, while Microsoft Pty Ltd supplied the subscriptions in Australia and adopted those communications. Its case invokes misleading or deceptive conduct under section 18 of the Australian Consumer Law and false or misleading representations about services and pricing under section 29(1)(i), (l) and (m). These are allegations in a court proceeding, not findings of liability. The ACCC’s concise statement of claim sets out the alleged conduct and legal provisions.
Which subscribers and prices are involved?
The case concerns Australian consumer subscriptions to Microsoft 365 Personal and Family, for home use. It does not cover Microsoft 365 Business or Enterprise subscriptions. The ACCC describes the consumer bundles as including apps and services such as Word, Excel, PowerPoint, OneNote, Outlook, Teams, SharePoint and OneDrive.
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Copilot was integrated into Australian Personal and Family subscriptions from October 31, 2024, with existing subscribers facing the higher price at renewal, according to the ACCC. Its October 27, 2025 release gave these annual-price examples:
| Consumer plan | Earlier annual price in the ACCC example | Copilot-integrated annual price in the ACCC example | Approximate increase |
|---|---|---|---|
| Microsoft 365 Personal | A$109 | A$159 | 45% |
| Microsoft 365 Family | A$139 | A$179 | 29% |
These are the Australian figures cited by the ACCC in 2025, not a statement of current 2026 prices or what every subscriber paid. Monthly versus annual billing, renewal timing, promotions, taxes and whether Microsoft or another provider billed the account can affect an individual’s charge.
The ACCC’s example of a Personal subscriber illustrates the alleged sequence, not a universal customer experience: the person had paid A$109 annually, received notice that renewal would cost A$159, and was later automatically renewed at that amount. Individual prices, dates and communications could differ.
How the alleged choice was presented
The ACCC identifies a Microsoft blog post dated October 31, 2024, an email to existing subscribers, and a later renewal-charge email as important communications. It alleges they conveyed that subscribers would need to accept the higher-priced Copilot plan to continue, or cancel.
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In the ACCC’s example, a later notice said the subscriber would be charged A$159 including taxes unless they cancelled before a stated deadline. The regulator’s point is not that customers lacked a way to cancel; it alleges that the notices left out a material alternative—continuing on a lower-priced Classic plan without Copilot.
| Choice the ACCC says the communications conveyed | Alternative the ACCC alleges was available |
|---|---|
| Continue with the Copilot-integrated plan at the higher price | Move to Personal Classic or Family Classic without Copilot at a lower price |
| Cancel the subscription | Remain subscribed while retaining the existing core features on Classic |
Where the Classic option allegedly appeared
According to the ACCC, a subscriber could find a Classic offer by opening the subscriptions section of their Microsoft account, choosing “Cancel subscription” and proceeding through the cancellation flow. The Classic option appeared during that process rather than in the main price-change communications. The ACCC says that placement matters because a subscriber could reasonably understand the notices to mean that the only alternatives were the higher price or losing the subscription.
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This is the regulator’s account of the flow at the time of the alleged conduct, not a guarantee that the same route or offer is available now. The ACCC warned that Microsoft controlled subscription options and prices and could change them.
Why the omission matters to the ACCC
The ACCC argues that the availability of a lower-priced plan could materially affect a consumer’s decision, particularly where the plan preserves core features and avoids an AI service the subscriber may not want. It also says Office applications are important to many users, making cancellation an imperfect substitute for continuing to use the software.
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What the ACCC is asking the Court to do
The ACCC says it is seeking penalties, injunctions, declarations, consumer redress and costs. Any outcome depends on the Court’s findings; the regulator’s requests are not an order or a promise of compensation.
For a corporation, the maximum penalty framework for each Australian Consumer Law breach is the greatest of A$50 million, three times the value of the benefit obtained and attributable to the conduct, or—if that benefit cannot be determined—30% of adjusted turnover during the relevant breach period. This is a statutory maximum framework described by the ACCC, not a prediction of the penalty Microsoft would face.
Microsoft’s response and the refund question
Microsoft later acknowledged that its communications could have been clearer about the available Microsoft 365 options, including Classic plans. ABC reporting on November 6, 2025 said Microsoft offered refunds to some eligible Australian customers who switched to a Classic plan. That acknowledgment is not an admission that Microsoft broke the law, and the reported offer does not establish that all subscribers qualify or that it remains open in 2026. Check directly with Microsoft for current terms rather than assuming a refund is available.
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- Identify who bills you. Check whether the subscription is billed directly by Microsoft or through an app store, retailer or other provider. The ACCC’s case does not establish that every billing channel uses the same change or refund process.
- Review your account records. Check Microsoft account services and billing history for the plan, renewal date and charges. Microsoft’s account portal is at account.microsoft.com/services.
- Keep the relevant documents. Save price-change emails, renewal notices and invoices, especially if you believe the available choices were not clearly explained.
- Ask Microsoft about your account specifically. Contact Microsoft through its official support page to ask about current plan options, billing and any refund eligibility. Do not assume that starting cancellation will preserve your subscription or reveal the same Classic offer described by the ACCC.
- Report relevant experiences to the ACCC. The regulator says consumer complaints and information submitted to its Infocentre helped it identify the Classic option in the cancellation process. A complaint is not a compensation claim and does not itself establish eligibility for redress.
If you already cancelled, that fact alone does not establish that you qualify for a refund or court-ordered redress. Eligibility could depend on the plan, renewal date, billing provider, communications received, any plan switch and the terms of any voluntary offer or eventual court order.
How the case developed—and its status
| Date | Event |
|---|---|
| 2023 | Microsoft launched Copilot as a consumer-facing generative AI product, according to the ACCC. |
| October 31, 2024 | Microsoft announced Copilot integration into Australian Personal and Family subscriptions and communicated the renewal price increase, according to the ACCC. |
| January 9, 2025 | In the ACCC’s example, a Personal subscriber was emailed that the annual price would rise from A$109 to A$159. |
| April 13, 2025 | In the example, a second email said A$159 would be charged unless the subscriber cancelled before the deadline. |
| April 19, 2025 | In the example, the subscription renewed automatically at A$159. |
| July 8, 2025 | The ACCC release referred to subscribers who had not yet renewed and might be able to switch through the cancellation process. |
| October 27, 2025 | The ACCC commenced Federal Court proceedings against Microsoft Corporation and Microsoft Pty Ltd. |
| November 6, 2025 | ABC reported a refund arrangement for some eligible Australian customers who moved to a Classic plan. |
As of August 18, 2026, the available material confirms the filing and the ACCC’s allegations, but does not verify a final judgment, penalty, settlement or completed consumer-redress order. The case should therefore be described as an unresolved proceeding unless a later court development is confirmed.
What this could mean for subscription customers
The case puts attention on the design of subscription changes as software companies add AI features to existing products. A higher price for a changed bundle is distinct from the question of whether customers were clearly told about available options. For consumers, renewal notices are most useful when they make both the cost of continuing and any material lower-priced alternatives easy to identify.
For an Australian Personal or Family subscriber deciding what to do now, start with the needs and options visible in the account rather than assuming that an old Classic price or cancellation-flow offer still applies. Staying with a Copilot plan may make sense if you use the AI features and accept the price; a no-AI plan, if currently offered to your account, may suit someone who wants the core apps without the added feature. Perpetual Office software or another suite may also be alternatives, but can differ in cloud storage, collaboration, updates, compatibility and recurring-cost structure. The case itself does not recommend a particular product or establish current prices.
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