Microsoft apologises to millions of Australian customers over subscription pricing

Just over a week ago, the Australian Competition and Consumer Commission (ACCC) launched proceedings in the federal court against Microsoft over allegedly false or misleading communication regarding the renewal of their Office 365 subscriptions.

The chair of the ACCC, Gina Cass-Gottlieb, alleged that Microsoft "deliberately" failed to mention the classic plan and "concealed" its existence to increase the number of users on the more expensive Copilot-integrated plans.

At the time, Cass-Gottlieb said: "The Microsoft Office apps included in 365 subscriptions are essential in many people's lives, and given there are limited substitutes to the bundled package, cancelling the subscription is a decision many would not make lightly.

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"We're concerned that Microsoft's communications denied its customers the opportunity to make informed decisions about their subscription options, which included the possibility of retaining all the features of their existing plan without Copilot and at the lower price," she said.

"We believe many Microsoft 365 customers would have opted for the classic plan had they been aware of all the available options."

While the ACCC heads to court seeking penalties and consumer redress, and Microsoft faces a maximum penalty of $50 million, Microsoft has today announced it is contacting affected customers via email from today.

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In a statement to 9News, a Microsoft spokesperson said: "Today we began reaching out to our Microsoft 365 Personal and Family subscribers in Australia regarding a subscription alternative that we could have communicated more clearly when we changed our pricing in October 2024.

"In response to the demand for advanced AI tools, we introduced AI capabilities into the Microsoft 365 Personal and Family subscriptions that we offer in Australia.

"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.

"In our email to subscribers, we expressed our regret for not being clearer about our subscription options, shared details about lower-priced alternatives that come without AI and offered a refund to eligible subscribers who wish to switch.

"We have been present in Australia for more than 40 years, operating on the principles of trust and transparency.

"We fell short of our standards here, and we apologise. We will learn from this and improve."

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Anyone with a Microsoft Office 365 subscription should keep an eye out for that email to ensure they are on the correct plan and take steps to receive any refund they may be entitled to.

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