Microsoft has been under scrutiny by antitrust watchdogs after rivals, including Salesforce's Slack, cited anticompetitive business practices for bundling Teams with Office 365. Consequently, the company caved to the pressure and unbundled Teams from its suite of productivity tools, avoiding a hefty fine from the European Commission.
But as it now seems, the software giant may have bigger fish to fry after the Australian Competition & Consumer Commission (ACCC) filed a lawsuit against it for allegedly misleading users of its Microsoft 365 bundle (via The Guardian).
For context, Microsoft increased the subscription price for its Microsoft 365 service by 45% for personal accounts, raising the annual cost to 179 AUD as of October 2024.
The commission submits that Microsoft willingly and deliberately misled approximately 2.7 million users into thinking that they only had two options: “to maintain their subscriptions, they must accept the integration of Copilot and pay higher prices for their plan, or, alternatively, cancel their subscription.”
Following a detailed investigation, we will allege in Court that Microsoft deliberately omitted reference to the Classic plans in its communications and concealed their existence until after subscribers initiated the cancellation process to increase the number of consumers on more expensive Copilot-integrated plans.
ACCC Chair, Gina Cass-Gottlieb
According to the ACCC:
“The ACCC alleges this information provided to subscribers was false or misleading because there was an undisclosed third option, the Microsoft 365 Personal or Family Classic plans, which allowed subscribers to retain the features of their existing plan, without Copilot, at the previous lower price.”
Earlier this year, The Register reported on Microsoft's plans to raise the subscription prices for its Microsoft 365 service to include the integration of Copilot AI into the services. While Microsoft indicated that it would list a "Classic" as an alternative, however, the company didn't provide more details or its availability online.
But while recently speaking to the outlet, a Microsoft spokesperson indicated:
"Consumer trust and transparency are top priorities for Microsoft, and we are reviewing the ACCC's claim in detail. We remain committed to working constructively with the regulator and ensuring our practices meet all legal and ethical standards."
However, the ACCC's chair claims that Microsoft deliberately denied its Microsoft 365 users the opportunity to make informed decisions about their subscriptions, "which included the possibility of retaining all the features of their existing plan without Copilot and at the lower price".
FAQ
Why did Microsoft unbundle Teams from Office 365?
Amid mounting pressure from the European Commission over anticompetitive business practices cited by rivals like Salesforce's Slack, Microsoft unbundled Teams from Office 365 to avoid a hefty fine. Users will now have to pay for the collaboration tool as a standalone service.
How does Copilot AI compare to ChatGPT?
Though both platforms are based on the same technology due to Microsoft's multibillion-dollar partnership with OpenAI, ChatGPT is seemingly more popular amongst users. Microsoft CEO Satya Nadella argued that OpenAI had a 2-year runway to build ChatGPT uncontested. Organizations seemingly prefer ChatGPT over Copilot, citing that OpenAI has done a tremendous job with the service. Interestingly, Microsoft revealed that the top complaint about its AI services was that Copilot isn't as good as ChatGPT, you're just not using it as intended. It was quick to shift blame to a lack of proper prompt engineering skills, leading to the launch of Copilot academy.
Follow Windows Central on Google News to keep our latest news, insights, and features at the top of your feeds!
