Microsoft apologises, offers refunds to 2.7M Australians (www.smh.com.au)

Australia’s competition watchdog has launched court action alleging Microsoft misled 2.7 million Australian subscribers about price rises tied to the integration of its Copilot AI into Microsoft 365. The ACCC says emails to auto-renewing 365 Personal and Family customers since Oct. 31, 2024, presented only two choices—accept Copilot and pay more, or cancel—while failing to disclose an existing lower‑priced “Classic” plan that preserves prior features without AI. Following the complaint, Microsoft apologised, began contacting affected customers, offered refunds to eligible users who switch to non‑AI plans, and acknowledged it “could have been clearer” about subscription alternatives. The ACCC is seeking penalties and consumer redress, with maximum fines up to A$50 million or higher depending on breach calculations. For the AI/ML community and product teams, the case highlights regulatory and reputational risks when bundling AI capabilities into core software and relying on renewal flows that obscure opt‑outs. Technical and UX implications include the need for explicit opt‑in semantics for AI features, clear billing and subscription alternatives, and audit trails showing customers were informed of non‑AI options. The outcome could set a precedent for how AI add‑ons are marketed and priced, influencing rollout strategies, compliance controls, and transparency standards across the industry.