Australia's competition watchdog accused Microsoft on Monday of misleading people into paying for its AI assistant Copilot.

The authority said it had filed a suit in the Federal Court against Microsoft Australia and its parent Microsoft Corp.

The software giant is accused of making "false or misleading" statements to around 2.7 million Australians who subscribe by auto-renewal to Microsoft 365 plans, which include a suite of online Office services.

Microsoft allegedly told customers that they had two options: either pay extra for Microsoft 365 services integrated with Copilot, or cancel their subscriptions altogether.

But there was a partly hidden third option -- visible only when people started to cancel -- of sticking to existing "Classic" plans without Copilot for the original price

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