Microsoft has recently come under fire for its AI subscription service, Copilot, with over 2.7 million users alleging that the company has misled them into signing up for costly plans. Customers have reported experiencing technical issues and delays when attempting to secure refunds. The controversy has now reached a regulatory stage, as the Australian Competition and Consumer Commission (ACCC) has initiated formal legal proceedings against Microsoft.

According to reports, Microsoft informed Microsoft 365 subscribers last year that the subscription fees for software bundles, including Copilot, would see a 45% increase. Users were presented with only two choices: 'accept the price hike' or 'cancel the subscription.' Crucially, Microsoft deliberately omitted a third option—renewing the Office software without AI features at the original price.

The ACCC has stated that despite Microsoft's apologies and pledges to issue refunds, the commission will proceed with legal action. It is seeking fines, injunctions, and mandatory compensation for affected users. If found liable, Microsoft could be compelled to refund up to $175 million in overcharged fees.

Microsoft has acknowledged that some users encountered difficulties in obtaining refunds due to erroneously sent cancellation links. Furthermore, the refund system has been plagued by frequent crashes, with customer service waitlists at times surpassing a thousand individuals. Users have until the end of this year to submit refund requests. However, due to the sheer volume of applications and escalating system glitches, they face lengthy queues when attempting to contact customer service.