The ACCC has taken legal action against Microsoft for allegedly misleading about 2.7 million Australians over its Microsoft 365 subscriptions which increased significantly in price early in 2025 when subscribers of Family and Personal plans were told they must pay a higher price to maintain their subscriptions, which would now include Copilot.
The proceedings have been lodged in the Federal Court against Microsoft Australia and its parent company, Microsoft Corporation.
Cheaper Classic Plan Exists but Hard to Find
In January 2025, Microsoft introduced Microsoft 365 Personal Classic and Family Classic plans, which exclude AI features and maintain previous pricing tiers but these plans were designed for users who prefer a simpler, more traditional Office experience.
However, many users report that the option to switch to these plans is not visible in their account dashboards, even after following Microsoft’s official instructions.
A growing number of complaints on Microsoft’s support forums and Q&A pages reveal that users attempting to downgrade are met with limited options, often only the ability to switch to monthly billing or upgrade to AI-enhanced plans.
Some users have discovered that the Classic options are hidden deep within the cancellation flow, requiring them to scroll past other options to find them.
ACCC Alleged Failure to Disclose ‘Classic’ Option
The ACCC claims that, starting from October 31, 2024, Microsoft informed users of its Microsoft 365 Personal and Family subscriptions who had auto-renewal enabled, that continuing their plan would require accepting the integration of Copilot and paying a higher subscription fee.
Alternatively, users were told they could cancel their subscription if they did not agree to the changes.
According to the regulator, Microsoft’s communications with subscribers failed to mention the availability of the more affordable “Classic” plans.
The only way users could access these plans was by initiating the cancellation process specifically, by navigating to the subscriptions section of their Microsoft account and selecting the “Cancel subscription” option.
Following the integration of Microsoft Copilot, the annual subscription price of the Microsoft 365 personal plan increased by 45% from $109 to $159.
The annual subscription price for the Microsoft 365 family plan increased by 29% from $139 to $179.
For more information about switching to Microsoft 365 Personal or Family Classic Plans, go to this link: Switching to Microsoft 365 Personal and Family Classic Plans – Microsoft Support
