New Delhi: Microsoft has apologised to customers in Australia after facing criticism over its recent price changes. The company admitted it was unclear about its plans and announced refunds for Microsoft 365 Personal and Family subscribers who paid extra after AI tools were added to their subscriptions.
It all started after raising the prices of its Microsoft 365 plans in October 2024, which includes an AI assistant, Copilot. The personal plan’s price went up by 45%, from $109 to $159 per year, while the family plan increased by 29%, from $139 to $179 per year, according to ABC News.
Microsoft AI Plan: Who Can Actually Claim a Refund
Around 2.7 million Australians could be eligible for refunds, The Guardian reported. Customers who decide to move back to the non-AI version, called the “Classic” plan, before the end of 2025 will get their refunds within 30 days. The refunds will cover payments made after November 30, 2024.
Those who wish to keep using the AI-powered plan with Copilot can continue at the higher price. However, the Classic plan will not have Copilot and may not get new features in the future.
How Microsoft AI Plan get caught
The apology comes shortly after the Australian Competition and Consumer Commission (ACCC) accused Microsoft of misleading customers by not informing them about cheaper plans that did not include AI tools. Some users were reportedly told that to keep their subscription, they had to accept the new AI features and higher prices or cancel their plan.
In an email to customers, Microsoft said it regretted not explaining its subscription options clearly. It also shared details about cheaper plans that do not include AI features and offered refunds to those who wish to switch back. The company said it was sorry for “falling short” of its standards of trust and transparency.
If found guilty, Microsoft could face heavy penalties. The maximum fine for such violations in Australia can be up to $50 million, three times the value of the misleading conduct, or 30% of the company’s turnover during the period of the breach.