Microsoft to refund customers for 365 subscription price hike after ACCC action

14 minutes agoWed 5 Nov 2025 at 10:23pm

Microsoft has come under fire for hiking its subscription prices. (AP)

Microsoft has apologised to customers and said it will refund them, after the consumer watchdog alleged the tech giant misled about 2.7 million Australians over subscription costs so they would remain on more expensive plans.

The company wrote to customers on Thursday to apologise to those affected, saying it “fell short of our standards” and could have “communicated more clearly when we changed our pricing in October 2024”.

Last week, the Australian Competition and Consumer Commission (ACCC) sued the tech giant for allegedly misleading Australians over its Microsoft 365 subscriptions.

“In response to the demand for advanced AI tools, we introduced AI capabilities into the Microsoft 365 Personal and Family subscriptions that we offer in Australia,” the company said on Thursday.

“In hindsight, we could have been clearer about the availability of a non-AI enabled offering with subscribers, not just to those who opted to cancel their subscription.

“In our email to subscribers, we expressed our regret for not being clearer about our subscription options, shared details about lower-priced alternatives that come without AI and offered a refund to eligible subscribers who wish to switch.”

Announcing the court action last week, the consumer watchdog slammed Microsoft for the conduct, alleging it “deliberately hid” a subscription option from Australian customers and said it would be seeking a penalty that would deter similar behaviour from other firms.