By Nick Gelling
Product Test Journalist | Kaipūrongo Whakamātautau Hautaonga
Microsoft is in court for allegedly misleading 2.7 million Australian customers on the pricing of its subscription plans. Meanwhile, New Zealand’s Commerce Commission chose not to investigate our complaint about the same practice.
Since 31 October 2024, Microsoft 365 subscribers have been told their plans now include limited access to Microsoft’s generative AI chatbot Copilot, and they must either pay higher prices or cancel their subscription.
The Australian Competition & Consumer Commission (ACCC) alleges this information was false or misleading, because a third option allowed subscribers to retain their existing plan, without Copilot, at the previous lower price.
Microsoft didn’t tell customers about these so-called ‘Classic’ plans. The only way customers could access them was if they began to cancel their subscription.
Nothing is happening in New Zealand
In November 2024, Consumer NZ explained to New Zealand consumers how to opt out of the upsell. We also questioned whether automatically shifting all customers of a product to a more expensive version – without telling them the existing product was still available – was misleading conduct that breached the Fair Trading Act.
We presented our research as a formal complaint to the Commerce Commission in January.
In April, the commission informed us it had sent a letter to Microsoft NZ, advising the company of the complaints that had been received and “reminding them of their obligations under the Fair Trading Act”.
The commission said it did not intend to investigate further at that stage.
We understand, based on reports we are still receiving from Consumer members, that Microsoft NZ has not changed how it communicates its plan options since receiving the commission’s letter.
The Australian commission takes the digital economy very seriously
According to the ACCC, its investigation drew on a significant number of consumer reports and the information provided by consumers was critical for alerting it to the alleged conduct. The ACCC is seeking consumer redress for Australian Microsoft 365 subscribers affected.
“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,” ACCC chairperson Gina Cass-Gottlieb said.
“We believe many Microsoft 365 customers would have opted for the Classic plan had they been aware of all the available options.”
If Microsoft is found guilty, its total fine could be A$50 million or three times the extra revenue it made from the alleged conduct – whichever is higher.
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