Australia’s competition regulator, the Australian Competition and Consumer Commission (ACCC), has filed a lawsuit against Microsoft Corporation, accusing the tech giant of misleading business customers about its artificial intelligence (AI) services. The regulator claims that Microsoft’s promotional materials and subscription models for its AI-enhanced software were unclear and deceptive, potentially breaching Australian consumer law.
Allegations of Misrepresentation in AI-Integrated Packages
According to the ACCC, Microsoft’s marketing suggested that AI-powered features were automatically included in its Microsoft 365 and Azure products, when in fact, these tools required additional purchases or premium upgrades. Many small and medium-sized businesses allegedly signed up for subscriptions under the belief that they would gain immediate access to AI features like Copilot, Microsoft’s advanced AI assistant.
Regulator Seeks Penalties and Consumer Compensation
The ACCC is seeking financial penalties, corrective measures, and customer compensation for affected organizations. Chair Gina Cass-Gottlieb stated that the case reflects the regulator’s broader push to ensure transparency in digital product marketing, particularly as AI becomes a key selling point in enterprise solutions.
Microsoft Responds to the Allegations
In response, Microsoft Australia said it is reviewing the ACCC’s claims and plans to cooperate fully with the investigation. The company added that it “strives to provide clear communication about its AI offerings” and maintains that Copilot’s availability and costs are disclosed in product documentation.
Global Scrutiny Over AI Advertising Practices
This legal action follows similar concerns raised in the EU and U.S., where regulators are increasingly monitoring how tech firms market AI-enabled products. As AI adoption accelerates, governments are pushing for greater accuracy in claims about capabilities, costs, and data usage.
Potential Impact on Tech Giants
If the lawsuit succeeds, it could set a precedent for AI marketing accountability in Australia and beyond. Other tech companies promoting generative AI tools may face tighter oversight, ensuring consumers receive truthful and transparent information about what they are paying for.