ISTANBUL

The Australian competition watchdog has sued Microsoft for allegedly misleading consumers, local broadcaster ABC reported on Monday.

The Australian Competition and Consumer Commission (ACCC) has filed a lawsuit against Microsoft Australia and its parent company, Microsoft Corporation, for misleading approximately 2.7 million Australians about its Microsoft 365 subscriptions.

The move came after the American multinational technology conglomerate allegedly misled customers about subscription options and price increases after incorporating its AI assistant, Copilot, into Microsoft 365 plans.

The regulator said Microsoft notified some subscribers late last year that they needed to pay more for plans that included Copilot or cancel.

The ACCC claimed that Microsoft misled customers by not disclosing that they could keep their current plans at the original price without Copilot.

"Following a detailed investigation, the ACCC alleges that Microsoft deliberately hid this third option, to retain the old plan at the old price, in order to increase the uptake of Copilot and the increased revenue from the Copilot-integrated plans," ACCC chair Gina Cass-Gottlieb said.

Cass-Gottlieb added that the regulator viewed this as "very serious conduct," noting that it would be seeking a significant penalty.

A Microsoft spokesperson told ABC News that the company is thoroughly reviewing the ACCC's claim, adding: "Consumer trust and transparency are top priorities for Microsoft."