ACCC Takes Legal Action Against Microsoft Over Price Hikes
A month ago, I expressed concerns regarding the recent price increases of Microsoft 365, questioning the fairness of these hikes, which seemed imposed on customers regardless of their interest in AI and Copilot features. Additionally, I noted that although a “Classic”plan—retaining the original pricing—exists, discovering it is not straightforward; it only becomes apparent during the cancellation process. Now, an Australian regulatory body has acted on similar concerns, filing a lawsuit against Microsoft.
ACCC Claims Microsoft Misled Customers
According to reports from ABC. NET, the Australian Competition and Consumer Commission (ACCC) has launched a lawsuit against Microsoft, alleging the company “deliberately misled”approximately 2.7 million customers regarding the recent pricing changes.
Allegations of Dark Patterns
The ACCC has raised issues regarding what they describe as “dark patterns”utilized by Microsoft to obscure the existence of the lower-cost Classic plan. The commission is pursuing a substantial penalty for this alleged misconduct. In a recent statement, a Microsoft representative confirmed that the company is currently assessing the ACCC’s allegations:
Consumer trust and transparency are top priorities for Microsoft. We remain committed to working constructively with the regulator and ensuring our practices meet all legal and ethical standards.
Consumer Reactions and Complaints
The ACCC reported receiving over 100 complaints from Microsoft 365 users recently. This productivity suite plays a crucial role in both personal and professional spheres for many Australians, particularly due to the limited alternatives available (apologies to LibreOffice).Consequently, the ACCC believes that many users would have preferred the Classic plan if it had been presented transparently.
Concerns Over Communication
The Commission pointed out that while Microsoft communicated through two emails and a blog post, these messages failed to adequately highlight the availability of the Classic plan:
We allege that Microsoft’s two emails to existing subscribers and the blog post were false or misleading as they conveyed that consumers had to accept the more expensive Copilot-integrated plans, and that the only other option was to cancel. All businesses need to provide accurate information about their services and prices. Failure to do so risks breaching Australian consumer law. The ACCC does not take issue with the offering of new services or a different plan, or an increase in price. Microsoft and businesses are free to change the services that they offer and to choose how to price them. We have taken these proceedings today because we allege millions of Australian consumers were deprived of the opportunity to make an informed choice about the subscription options available to them.
The Path Forward
While Microsoft has not yet provided a comprehensive response to the lawsuit, it appears that the ACCC may have a compelling case. The outcome remains to be seen as it unfolds in the court system.
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