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Microsoft Faces Legal Action in Australia Over Copilot Pricing Practices

by Team Lumida
October 27, 2025
in Markets
Reading Time: 3 mins read
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The AI Investment Dilemma: Future-Proof or Financial Folly?

"Copilot Microsoft" by Microsoft is licensed under CC CC0 1.0

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Key Takeaways

  • Australia’s ACCC has sued Microsoft for allegedly misleading 2.7M Microsoft 365 subscribers on Copilot-related price hikes.
  • Regulator claims Microsoft hid cheaper “classic” non-Copilot plans until users started to cancel subscriptions.
  • Price increases: +45% for 365 Personal and +29% for Family plans in Australia.
  • Potential penalties: up to A$50M (US$32.6M) per breach plus refunds to affected customers.

What Happened?

The ACCC filed a case alleging Microsoft failed to clearly disclose how customers could avoid paying for its new Copilot AI services when renewing Microsoft 365 subscriptions. Communications focused on cancellation rather than the option to decline Copilot while retaining existing plan features. The regulator says this omission pushed users into more expensive Copilot-integrated plans without explicit consent.

Why It Matters?

The suit raises enforcement risk around AI-linked price upgrades and transparency in subscription migration. Regulators globally are scrutinizing how tech firms commercialize AI add-ons, particularly when embedded into essential productivity software. The complaint challenges the design of Microsoft’s renewal flow and could influence pricing disclosures and opt-out standards across markets. Potential fines and mandated refunds could create financial and reputational liability.

What’s Next?

Microsoft is reviewing the allegations. Court proceedings will test whether bundling Copilot meets consumer law obligations in Australia. Investors should watch for ripple effects: regulatory copycats in Europe or North America, changes to AI upsell practices, and any revenue impact if customers revert to lower-cost plans. Enforcement outcomes could shape how aggressively Microsoft monetizes Copilot across its global licensing base.

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© 2025 Lumida Wealth Management LLC is an SEC registered investment adviser. Privacy Policy. Cookies Policy.
Disclaimer Important Information This site is for informational purposes only. Information presented on this site does not constitute as investment advice.

Lumida Wealth Management LLC (‘Lumida”) is an SEC registered investment adviser. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability.

Lumida's website (referred to herein as the "Website") is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links. Accordingly, the publication of the Website on the Internet should not be construed by any client and/or prospective client Lumida’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet.

Any subsequent, direct communication by Lumida with a prospective client will be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.

‍Lead Capture Forms: By submitting your contact information in the forms on this site, you are not obligated to invest in Lumida's product or services.
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