Microsoft has apologized to its 2.7 million Microsoft 365 users in Australia and offered refunds after facing legal action over how it handled recent subscription changes linked to its artificial intelligence (AI) tools.
On October 27, the Australian Competition and Consumer Commission (ACCC) launched a case against the company.
The regulator claimed that Microsoft failed to inform users about cheaper subscription options when it bundled its Copilot AI assistant into Microsoft 365 Personal and Family plans in October, which also came with higher prices.
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In an email sent to affected customers, Microsoft said it had added AI features to respond to demand for advanced tools. However, the company admitted it “could have been clearer about the availability of a non-AI-enabled offering with subscribers“.
Microsoft stated:
Our relationship with our customers is based on trust and transparency, and we apologise for falling short of our standards.
The company outlined two choices for subscribers. Customers can continue using the AI-supported plan, priced between $10 and $12 (AU$16–$18) per month, or move to Microsoft 365 Classic, which costs $7 to $9 (AU$11–$14) monthly and does not include Copilot.
Those who switch to the Classic version by the end of the year will receive a refund for the difference in cost, with their first renewal after November 30, 2024, reverting to the Classic version.
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