Microsoft Apologies for Price Rise, Offers Refund to Nearly 3 Million Aussie Customers

Following a lawsuit from the competition watchdog, tech giant Microsoft has issued an apology to nearly 3 million Australians affected by recent price rises to its popular office app.

On Nov. 6, the company said it had reached out to subscribers of Microsoft 365 Personal and Family to express regret for its failure to communicate “more clearly” about the price changes announced in October 2024.

At the time, people subscribing to a personal plan were informed that its annual price would increase by 45 percent from $109 (US$71) to $159.

Likewise, those on a family plan saw a 29 percent price hike from $139 to $179 a year.

The change automatically applied when consumers’ subscriptions were renewed.

Microsoft cited the company’s earlier decision to incorporate two AI tools, Copilot and Designer, into Microsoft 365 Personal and Family app subscriptions as the reason for the new pricing.

The tech giant also noted that the changes were necessary to add new benefits to its subscription service, and to ensure “customers are among the first to access powerful AI features” in its apps.

However, in a lawsuit filed on Oct. 27, 2025, the Australian Competition and Consumer Commission (ACCC) alleged that Microsoft misled consumers by hiding the option to keep their existing subscription plans unchanged when announcing the price increases.

This version, called Microsoft 365 Personal or Family Classic, does not contain Copilot and Designer. However, to access it, users must first cancel their subscription and then resubscribe.

ACCC Chair Gina Cass-Gottlieb alleged that Microsoft’s actions could constitute a breach of the Australian Consumer Law, as they led consumers to believe they had no choice but to accept the more expensive Copilot-integrated plans.

If found guilty, Microsoft could be subject to a hefty fine.

Under the Australian Consumer Law, a corporation may face a maximum penalty of $50 million, three times the total benefits obtained, or 30 percent of its adjusted turnover during the breach turnover period, whichever is greater.

Microsoft’s Apology

Microsoft stated that it regretted not making the lower-priced alternatives more transparent to customers in its previous email communications.

“In response to the demand for advanced AI tools, we introduced AI capabilities into the Microsoft 365 Personal and Family subscriptions that we offer in Australia,” the company said in a statement.

“In hindsight, we could have been clearer about the availability of a non-AI-enabled offering with subscribers, not just to those who opted to cancel their subscription.

“We have been present in Australia for more than 40 years, operating on the principles of trust and transparency. We fell short of our standards here, and we apologise. We will learn from this and improve.”

In addition, the company said it had offered a refund to eligible subscribers who wished to switch back to their previous plans.

Specifically, Microsoft will refund the price differences starting from customers’ first renewal date after Nov. 30, 2024.

Nevertheless, this refund option is only available to subscribers who receive the company’s notification email and switch to the Microsoft 365 Personal or Family Classic plan by Dec. 31, 2025.