Is Microsoft’s Copilot a ‘Bait and Switch’? New Lawsuit Alleges Deceptive AI Subscriptions
Microsoft is facing a significant legal challenge over its flagship AI product, Copilot for Microsoft 365. A class-action lawsuit has been filed, accusing the tech giant of engaging in a “deceptive bait-and-switch scheme” by selling a product that allegedly fails to deliver on its ambitious promises. This legal action raises serious questions about the transparency of AI product marketing and what customers are truly getting for their money.
At the heart of the complaint is the claim that Microsoft advertised and sold Copilot as a revolutionary, fully-integrated AI assistant capable of transforming productivity across the entire Microsoft 365 suite, including Word, Excel, Outlook, and Teams. However, the lawsuit argues that the reality for many subscribers is a far cry from this polished marketing vision.
The Core Allegation: A Product That Fails to Function as Advertised
The lawsuit contends that after businesses and individuals paid the premium subscription fee—often an additional $30 per user per month—they discovered that Copilot did not function as advertised “out of the box.” Instead of a seamless experience, users allegedly found an AI tool that was incomplete and required significant, often undisclosed, prerequisites to unlock its most powerful features.
The central accusation is that Microsoft knowingly sold a product that was not ready for market. The legal filings claim that to access the full functionality showcased in demonstrations and advertisements, users are forced to install separate, and sometimes new, applications that were not part of their existing M365 setup. This disconnect between the marketed product and the delivered experience forms the basis of the “bait-and-switch” allegation.
Hidden Requirements and the “New Outlook” Controversy
A key example highlighted in the lawsuit revolves around Microsoft Outlook. Many businesses rely on the classic desktop version of Outlook for its stability and extensive features. However, the lawsuit claims that many of Copilot’s most heavily promoted AI features for email management only work with the “new” Microsoft Outlook.
This creates a major problem for subscribers who either cannot or do not want to migrate to the new application, effectively locking them out of the very features they paid to access. The complaint argues that Microsoft failed to adequately disclose this critical dependency, leading customers to purchase a subscription for capabilities their current software environment could not support.
The ‘Perpetual Preview’ Problem
Beyond specific feature limitations, the lawsuit characterizes Copilot for M365 as being in a state of “perpetual preview.” This term suggests that customers are paying a premium price for what is essentially an unfinished or beta-stage product.
The complaint alleges that Microsoft released Copilot prematurely to capture market share in the competitive AI landscape, passing the burden of its incomplete development onto paying customers. This practice, the lawsuit argues, violates consumer protection laws by misrepresenting the product’s readiness and capabilities.
What This Means for M365 Subscribers and Businesses
For current and prospective Copilot users, this lawsuit serves as a critical reminder to exercise due diligence. While the legal proceedings are in their early stages, the allegations highlight potential pitfalls when investing in emerging AI technologies.
Here are some actionable steps businesses should consider:
- Audit Your Current Applications: Before purchasing a Copilot subscription, thoroughly assess your organization’s current software environment. Verify that your versions of Outlook, Teams, and other M365 apps are fully compatible with the specific Copilot features you intend to use.
- Run a Pilot Program: Instead of a full-scale deployment, consider rolling out Copilot to a small, controlled group of users. This allows you to test the functionality in your real-world environment, identify compatibility issues, and measure the actual ROI before committing to a larger investment.
- Demand Transparency from Vendors: Use this as an opportunity to ask detailed questions during the sales process. Inquire about specific software dependencies, feature limitations, and the product roadmap to ensure you have a clear understanding of what you are buying.
The outcome of this lawsuit could have far-reaching implications for the AI industry, potentially setting a new precedent for how AI products are marketed and sold. For now, it stands as a cautionary tale for organizations navigating the hype-filled world of artificial intelligence.
Source: https://www.bleepingcomputer.com/news/microsoft/microsoft-sued-for-allegedly-tricking-millions-into-copilot-m365-subscriptions/
