Microsoft told 2.7 million Australians: take Copilot or leave.

The Australian Competition and Consumer Commission commenced Federal Court proceedings against Microsoft Australia and Microsoft Corporation over communications to approximately 2.7 million Microsoft 365 Personal and Family subscribers. The ACCC alleges customers were told they needed to accept Copilot and a higher price—or cancel.

The regulator says a third option existed: Microsoft 365 Personal or Family Classic, which retained the existing features without Copilot at the lower price. The alleged problem was not merely the price increase. It was the way the choice was framed.

The AI upgrade nobody asked for

The ACCC says the annual Personal price rose from $109 to $159 and the Family price from $139 to $179 after Copilot was integrated. Microsoft described the change as adding value. Customers were left to discover that ‘continue’ and ‘cancel’ were not the only paths.

This is the AI version of a forced upgrade: attach a new capability to a familiar plan, raise the price, and make the old product hard to find. The feature can be useful while the communication is still misleading.

Choice has to be visible

A fair upgrade notice would show the old plan, the new plan, the exact price difference and the no-AI alternative in the same message. It would not make a customer threaten cancellation to reveal the product they were already paying for.

Australia’s case is a useful warning for every software company adding AI: disclosure is not a footnote after the revenue decision. It is the product experience.