Australia sues Microsoft over ‘misleading’ AI offering
Sydney, Australia, (EFE).
Australia’s competition regulator filed a lawsuit in the Federal Court on Monday against Microsoft Australia and its parent company, Microsoft Corporation, for allegedly deceiving some 2.7 million users in the country over its new Copilot artificial intelligence (AI) assistant plans.
The Australian Competition and Consumer Commission (ACCC) said that starting Oct. 31 last year, the tech company informed users of the automatically renewed Microsoft 365 Personal and Family plans that they must accept the integration of Copilot in the plans—with an annual price increase of 45 percent and 29 percent respectively—or cancel their subscription.
However, it did not disclose the existence of ‘Classic’ plans, which allowed users to maintain the original Personal or Family plans without Copilot and at the previous price.
“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 said in a statement.
The integration of this AI service resulted in substantial increases in the cost of the service, which is essential for many Australians and companies and, unaware of all the available options, they would have accepted the price increase, according to the regulator.
The lawsuit alleges that Microsoft sent two emails and published a blog post informing consumers of the new pricing and the integration of the AI assistant. These communications, according to the ACCC, were “false or misleading” in the omission of the option to maintain the original subscription.
The regulator is seeking court orders including penalties, injunctions, declarations, consumer redress, and costs.
Maximum fines for violations of the Australian Consumer Law can reach AU$50 million (more than $32.5 million) or 30 percent of the company’s turnover during the period of the violation.
Microsoft 365, which bundles programs such as Word, Excel, PowerPoint, and cloud services through OneDrive, integrated Copilot as its main generative AI tool starting in late 2024
