Exactly a month ago, I penned an editorial in which I complained that Microsoft 365"s latest price hikes seem unjustified because they are enforced upon customers, regardless of whether they want to use AI and Copilot features or not. In the same piece, I also lamented the fact that while the "Classic" plan did exist with the original pricing, it is not immediately obvious and is only offered when you are in the process of canceling your current plan. Now, an Australian watchdog has sued Microsoft on these exact same grounds.
Reporting from local media news outlet, ABC.NET, has revealed that the Australian Competition and Consumer Commission (ACCC) has sued Microsoft for "deliberately misleading" 2.7 million regional customers when it came to the matter of the recent price hike. The watchdog claims that Microsoft repeatedly told customers that they either had to agree to the price increase or cancel their plan, without clearly identifying the third option of a "Classic" plan at reduced prices.
According to reports, the ACCC is not happy with the dark pattern that Microsoft utilized for hiding this low-cost plan, saying that it will be seeking a significant penalty in this regard. Meanwhile, a Microsoft spokesperson confirmed that the company is currently reviewing the ACCC"s claims:
Consumer trust and transparency are top priorities for Microsoft. We remain committed to working constructively with the regulator and ensuring our practices meet all legal and ethical standards.
The ACCC highlighted that it received over 100 complaints from Microsoft 365 users recently, and since this suite is an essential part of the personal and professional lives on many Australians due to the lack of better alternatives (sorry, LibreOffice), it believes that most customers would have just opted for the Classic plan had they been made more aware about their options.
The ACCC noted that while Microsoft did send out two emails and published a blog post, they did not emphasize the presence of a Classic plan:
We allege that Microsoft"s two emails to existing subscribers and the blog post were false or misleading as they conveyed that consumers had to accept the more expensive Copilot-integrated plans, and that the only other option was to cancel. All businesses need to provide accurate information about their services and prices. Failure to do so risks breaching the Australian consumer law. The ACCC does not take issue with the offering of new services, or a different plan, or, actually, an increase in price. Microsoft and businesses are free to change the services that they offer, and also to choose as they see fit how to price for them. We have taken these proceedings today because we allege millions of Australian consumers were deprived of the opportunity to make an informed choice about the subscription options available to them.
Although Microsoft is yet to respond in detail to the complaint and the lawsuit, it is this writer"s opinion that the ACCC does have a strong case going this time. Only time will tell if the court of law feels the same.