As many as 2.7 million Microsoft 365 users could soon see compensation, as Microsoft facing huge lawsuit involving millions of citizens over unfair software pricing becomes one of the most high-profile tech legal battles of 2025.

The Australian Competition & Consumer Commission (ACCC) has accused Microsoft of misleading consumers over the pricing and renewal of its Microsoft 365 subscriptions — a claim that could have major global implications for the software giant.

Microsoft accused of unfair software pricing practices

According to the ACCC, Microsoft allegedly encouraged customers to stick with auto-renewal plans on their Microsoft 365 subscriptions, even when cheaper or more practical options were available.

These actions, the watchdog says, could have misled up to 2.7 million users of Microsoft 365 Personal and Family plans, many of whom were unaware they could downgrade or switch to a less expensive plan.

If successful, the lawsuit could result in millions in compensation payouts to affected users, sending a strong message about transparency in subscription-based pricing.

What triggered the lawsuit?

The ACCC’s complaint centers around Microsoft’s integration of its Copilot AI platform into Microsoft 365 in Australia back in October 2024.

Users were allegedly told that this AI upgrade meant they would need to pay higher prices to keep their existing plans. However, regulators say that wasn’t true — Microsoft had a hidden “Classic” plan available, which allowed customers to keep their old subscription without the Copilot AI and without a price increase.

This undisclosed third option is at the heart of the ACCC’s claim, accusing Microsoft of providing “false or misleading” information to consumers.

Millions of users could be eligible for compensation

If the lawsuit succeeds, Microsoft could owe refunds or compensation to the affected customers who were charged higher renewal rates or weren’t properly informed about alternative plans.

Consumer rights groups in Australia have praised the lawsuit as a step toward greater accountability for big tech companies, especially those operating subscription-based models with complex pricing tiers.

Microsoft has not yet issued an official public response, though sources suggest the company is reviewing the ACCC’s allegations closely.

Why this lawsuit matters globally

While this case is focused on Australia, the implications could extend far beyond. Similar subscription models exist in other countries, and regulators elsewhere may investigate if users have been misled over software pricing or auto-renewal practices.

The outcome could also affect how tech giants introduce AI-powered upgrades like Copilot in the future — particularly if they bundle new features that raise prices without offering clear alternatives.

This lawsuit comes at a time when Microsoft is already under scrutiny for its enterprise pricing and competition policies, especially in the EU and U.S.

The Microsoft facing huge lawsuit involving millions of citizens over unfair software pricing case highlights growing global frustration with opaque tech subscription practices.

If the ACCC wins, it could set a major precedent — forcing Microsoft and other companies to be more transparent, flexible, and fair when introducing new plans or AI-powered upgrades.

Until then, millions of Microsoft 365 users will be watching closely to see how this legal showdown unfolds.