Microsoft Issues Refunds to Almost Three Million Australians
Nearly three million Australians are set to receive refunds following Microsoft’s acknowledgment of a controversial pricing model for its artificial intelligence tools.
On Thursday, Microsoft Australia dispatched emails to software subscribers, expressing regret over the ambiguity in its pricing structure, which it conceded did not meet its own standards.
This announcement comes just ten days after the Australian Competition and Consumer Commission (ACCC) initiated legal proceedings against both Microsoft Australia and its parent corporation in federal court.
The ACCC claims that the tech giant misled consumers regarding subscription prices and failed to adequately inform them of more economical options devoid of AI capabilities.
If the court rules in favor of the commission, Microsoft could be subjected to substantial financial penalties.
Commencing Thursday morning, Microsoft reached out to subscribers of Microsoft 365 Personal and Family plans, delineating available options and formally apologizing for previous uncertainties.
The subscription plans are categorized into four tiers: $16 and $18 packages encompassing access to the AI assistant Copilot, alongside $11 and $14 “classic” plans that exclude the AI component.
Microsoft announced that subscribers choosing to revert to the more affordable plans before the conclusion of 2025 would be entitled to refunds, retroactive to payments made after November 30, 2024.
“Our relationship is predicated on trust and transparency; we sincerely apologize for our failure to meet these expectations,” stated the email sent to subscribers.
According to the lawsuit, around 2.7 million subscribers were allegedly coerced into paying premium rates for the Copilot-enhanced subscriptions, remaining uninformed about available lower-cost alternatives until they attempted to terminate their service.
“Consumers were deprived of the opportunity to make educated decisions regarding their subscription choices,” commented ACCC chair Gina Cass-Gottlieb.
In a recent statement, Microsoft Australia acknowledged inadequacies in its communication practices.
“In retrospect, we recognize that we should have clearly articulated the existence of a non-AI-enabled offering to all subscribers, not solely to those contemplating cancellation,” the company remarked.
While the refunds could financially strain Microsoft, the corporation is also at risk of incurring hefty fines if the ACCC successfully pursues its lawsuit against it.
The potential maximum penalties for corporations found guilty of anti-competitive conduct include fines reaching $50 million, three times the value of the misleading act, or 30% of the company’s adjusted turnover during the breach period.
Source link: Theguardian.com.
