Microsoft Australia apologized and offered refunds to about 2.7 million subscribers after the ACCC alleged it misled customers about Copilot pricing and the availability of cheaper, non-AI plans.

After the pricing changes, the Copilot-enabled bundles saw notable increases: the 365 Personal annual price rose to $159 and the Family plan to $179, creating a meaningful upcharge for subscribers.

Subscribers now face a choice: stay on the Copilot-enabled plan at the higher price or switch to the non-AI Classic plan, which may not receive future Copilot updates.

In New Zealand, authorities issued a warning letter to the company and did not pursue a formal investigation at this stage according to local reporting.

The incident sparked broader discussions on consumer protections and could lead to further penalties depending on court outcomes.

The ACCC case in Federal Court could set a precedent for global AI pricing and bundling practices by tech companies.

The rollout of the apology in New Zealand faced technical problems, including broken refund links and long support queues, undermining the initiative.

ACCC President Gina Cass-Gottlieb warned that providing inaccurate information about services and prices can violate Australian consumer law, underscoring regulatory risk for the industry.

The case underscores the need for clear, accurate information on services and pricing under Australian consumer law.

Prices for Copilot-enabled bundles rose earlier in the year in several Asia-Pacific markets, with questions about whether apologies would follow in those nations.

The case highlights ongoing scrutiny of AI-related pricing and consumer transparency in subscriptions for AI-enabled tools, including disclosure of available plan options.

The situation emphasizes disclosure gaps around Copilot integration and pricing, fueling calls for clearer options for customers.

Official communications stress trust and transparency, clarifying how personalization depends on subscription type and billing cycle.