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Microsoft did raise the price of some consumer Microsoft 365 subscriptions after adding Copilot, but the central legal dispute is narrower: the Australian Competition and Consumer Commission (ACCC) alleges Microsoft did not clearly tell subscribers about cheaper no-Copilot “Classic” plans before renewal. The Federal Court case concerns Australian Personal and Family customers—not all Microsoft 365 users worldwide—and the allegation has not yet become a final court finding.
Separate consumer investigations are under way in the United Kingdom and Italy. They should also be kept distinct from Microsoft’s July 1, 2026 commercial pricing and packaging update, which Microsoft says did not change consumer prices.
What lawsuit is Microsoft facing?
The ACCC filed proceedings in the Australian Federal Court in October 2025 against Microsoft’s Australian and US corporate entities over communications to Australian consumers. The regulator alleges that Microsoft misled millions of Australian subscribers to Microsoft 365 Personal and Family plans. The case does not concern Microsoft 365 Business or Enterprise subscriptions.
The ACCC is seeking penalties, declarations, injunctions, consumer redress and costs. Those are remedies the regulator is asking the court to consider; they do not mean that every subscriber is entitled to a refund or that a contravention has been finally established.
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Read the ACCC’s account of the case at the ACCC media release.
What Microsoft allegedly told subscribers
The ACCC says Microsoft added Copilot to existing Personal and Family plans during a subscriber’s already-paid period, then told customers their price would rise at the next renewal. According to the regulator, the communications presented the practical choice as accepting the higher-priced Copilot plan or cancelling.
The alleged omission is the key issue. The ACCC says cheaper Personal Classic and Family Classic plans—without Copilot and at the previous lower prices—were not clearly identified in the emails or Microsoft’s blog post. Customers allegedly saw the Classic alternative only after starting the cancellation process.
That distinction matters legally. A provider can generally change a subscription price when it gives adequate notice and follows applicable consumer rules. The allegation here is that consumers were not shown a material, cheaper renewal option clearly enough to make an informed choice.
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The communications identified by the ACCC
- Microsoft published a consumer-plan announcement on October 31, 2024.
- An example subscriber received an email on January 9, 2025 saying Copilot features would be added and the annual Personal price would rise from A$109 to A$159.
- A later renewal reminder warned that the new amount would be charged unless the customer cancelled before the deadline.
- The example Personal subscription renewed at A$159 on April 19, 2025.
The ACCC’s case will require the court to examine what the notices actually disclosed, what a reasonable customer would have understood, whether Classic plans were available to eligible accounts, and whether the presentation affected renewal decisions.
How much did the Australian prices rise?
| Consumer plan | Previous annual price | Copilot-inclusive annual price | Increase |
|---|---|---|---|
| Microsoft 365 Personal | A$109 | A$159 | 45% |
| Microsoft 365 Family | A$139 | A$179 | 29% |
These are Australian annual figures cited by the ACCC. They are not current US prices, and they should not be mixed with monthly billing, another currency, taxes or a different market.
What “millions were tricked” actually means
The ACCC uses the formulation “millions of Australian consumers” in describing the potentially affected group and alleged economic harm. That does not establish that millions of people worldwide were forced into Copilot plans. It also does not make “tricked” a court finding: the legally accurate descriptions are “the ACCC alleges Microsoft misled customers” and “the court has yet to decide the case.”
Reports sometimes cite approximately 2.7 million Australian Personal and Family subscribers, but the ACCC’s public statement is the safer primary-source basis for describing the number as millions of Australian consumers.
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What are the Classic plans?
Classic plans are lower-priced, no-Copilot versions made available to some existing Personal and Family subscribers. The ACCC says they retained the core features of the customer’s previous plan at the previous lower price. Microsoft’s options can vary by country, account, billing arrangement and date, and Microsoft controls which offers appear.
The UK Competition and Markets Authority describes Classic as a time-limited option for existing customers. Microsoft stopped offering the older no-new-features plans to new subscribers, according to the CMA. An existing customer therefore should not assume that a Classic option will always be available—or that a new account can obtain it.
Microsoft’s support page describing the switching process is available here.
Where the ACCC says the option appeared
- Open the subscriptions section of the Microsoft account.
- Select Cancel subscription.
- Continue through the cancellation screens.
- Review the later page for a Classic-plan alternative before confirming cancellation.
This is the path described by the ACCC for the conduct under examination. It is not a guarantee that every account today will show the same screens or offer. Microsoft may change the interface, and availability can be time-limited or account-specific.
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Timeline of the related events
| Date | Event |
|---|---|
| October 31, 2024 | Consumer-plan price-change announcement identified by the ACCC. |
| January 9, 2025 | Example subscriber notified of Copilot addition and the A$109-to-A$159 Personal increase. |
| April 19, 2025 | Example subscription renewed at A$159. |
| October 2025 | ACCC commenced Federal Court proceedings. |
| June 26, 2026 | Italy’s AGCM opened a consumer investigation. |
| July 1, 2026 | Microsoft’s separate commercial pricing update took effect. |
| July 27, 2026 | UK CMA opened its consumer-protection investigation. |
| July 29, 2026 | CMA published its public description of the investigation. |
What is happening in the UK?
The CMA is investigating whether Microsoft gave consumers clear and timely information about Microsoft 365 Personal and Family choices and price differences before renewal. The CMA lists these UK annual prices:
| Plan | Classic annual price | Plan with additional features | Difference |
|---|---|---|---|
| Microsoft 365 Personal | £59.99 | £84.99 | £25 |
| Microsoft 365 Family | £79.99 | £104.99 | £25 |
The figures are UK-specific annual prices published by the CMA and should not be generalized to other countries. The CMA says it has reached no conclusion and is still gathering evidence. Its case page is available here, with the pricing announcement at this page.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What is Italy investigating?
Italy’s competition authority, the AGCM, opened a separate investigation on June 26, 2026. It is examining whether Microsoft failed to make clear that Microsoft 365 had been integrated with Copilot and Designer, presented information in a fragmented way, or placed consumers by default on a higher-priced plan unless they exercised a withdrawal right.
That is an investigation, not a final infringement decision. The AGCM announcement is at the authority’s website.
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Do not confuse the consumer case with Microsoft’s 2026 commercial increase
Microsoft’s separate commercial FAQ says a pricing and packaging update took effect on July 1, 2026, with existing commercial customers generally seeing the new price at their next renewal. It covers listed business, enterprise, government, education, frontline, Windows, EMS, Intune and related commercial SKUs.
Microsoft says that update did not change consumer pricing. It also says standalone Teams and Copilot SKUs were not part of that particular announced update. The commercial details are in Microsoft’s FAQ.
- Australian Federal Court case: consumer Personal and Family plans; alleged failure to disclose cheaper Classic options.
- UK and Italy: separate investigations into consumer-plan marketing and renewal choices.
- July 2026 commercial update: business and other commercial licensing; not the subject of the Australian consumer lawsuit.
What subscribers should check before cancelling
- Sign in to the Microsoft account that controls the subscription and note the renewal date, billing frequency and renewal amount.
- Review every plan option shown, including any Classic or no-Copilot offer, before confirming cancellation. Do not assume the option is available on every account.
- Check OneDrive usage. Ending or changing a plan can reduce storage and affect access to files, so download or migrate data before the subscription ends if necessary.
- Save screenshots of the displayed plans, prices, renewal notice and deadlines, and keep invoices and payment records.
- If you bought through Apple, Google, Amazon, a workplace administrator or another retailer, check that seller’s billing controls; Microsoft may not control the available cancellation path.
- Contact Microsoft support about an unexpected charge and retain the case number.
Whether a customer wants Copilot is a separate value decision. Desktop Word, Excel, PowerPoint and Outlook, OneDrive storage, file compatibility and household sharing can make Microsoft 365 useful; users who do not need those features may compare browser-based services such as Google Workspace and Google One, Apple’s iWork and iCloud, or the free locally installed LibreOffice. Those alternatives differ in desktop compatibility, storage, collaboration, macros, email and administration.
Can subscribers claim money back?
Not automatically. The ACCC is asking for consumer redress, but eligibility, amounts and the process have not been established. A regulator’s case or investigation does not itself create a refund entitlement.
Be cautious with pages that collect names for a possible claim. A law firm’s sign-up page is not proof that a US class action, settlement or judgment exists. For example, ClassAction.org’s page describes claimant gathering, not an established court award. Australian, UK and Italian consumers should rely on official regulator updates or qualified legal advice for their jurisdiction.
Where the case stands
The verified picture is a regulator-led Australian lawsuit alleging that Microsoft’s renewal communications obscured cheaper Classic choices, alongside UK and Italian investigations into related consumer-plan practices. The allegations, price examples and potential remedies remain subject to legal processes. Customers should inspect their own renewal screen and account terms rather than assume that cancellation is the only alternative—or that a refund is guaranteed.
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