Assessment 3: Case Study Analysis

COMM1100 - 2025 Term 1

In this assessment you will apply the tools and concepts you have learned and developed in the first half of the course to analyse a business case. Tutorial activities in Weeks 1-7 provided an opportunity for you to practice the skills needed to complete this assignment.

The case and questions will be released at 5:00pm (AEDT) on Friday, 21 March 2025

The assessment is due at 5:00pm (AEDT) on Friday, 4 April 2025

Expected Length: Expected Length: Approximately 1,200 words, +/-10% (i.e., please aim for your submission to be between 1,080 and 1,320 words). The word count includes all tables, graphs, and figures, but does not include your reference list and in-text citations.

Every 200 words in excess of the upper limit will reduce your overall assessment mark by 1.

Font: Please use Arial, Calibri, Times New Roman or Roboto font, 12 point. Some other fonts are not easy for the markers to download.

Format: No cover page. Please do not copy the questions into your response.

Referencing style.:Harvard. You are expected to provide in-text citations and a reference list. (Law references follow a citation system called the Australian Guide to Legal Citation 4th edition and not the Harvard referencing style. However, for the purposes of this assessment, Harvard referencing is acceptable. Guidelines for referencing AI software are provided below)

Weighting: 25%

Submit your assessment in the 5. Submit Your Case Response Turnitin link found within the Assessment 3 tab on Moodle.

Acceptable file formats: Your submission must be saved as a PDF or Word document.

Save your file as [Last Name, First Name] [Your zID] Assessment 3 COMM1100.

Detailed submission instructions

You can find all resources and submission links you need to complete and submit your assessment under the ‘Assessment 3: Case Study Analysis’ tab in Moodle.

Before opening the Case Study Brief and Detailed Instructions, you are expected to open and read theStudent Declarationregarding academic integrity.

All students must complete the Generative AI questionnaire before submitting your answers.

This is available under the “4. Generative AI” heading.

Your submission link will not become active until you have completed this.

Submit your assessment document using the Submit Your Case Response Turnitin submission link. This is available under the “5. Submit Your Case Response” heading.

If you used generative AI at any stage in the planning, research and writing of yourassessment, you must submit a supplementary document (explained below) via the AI Documentation Turnitin link under the “6. AI Documentation” heading.

Submission of incorrect/unreadable documents

It is your responsibility to check your assessment submission. The COMM1100 team is NOT responsible for checking that you have submitted the correct document.

Submitting an irrelevant document will result in a mark of 0. Submitting the correct document after the submission date will attract late penalties.

Case Background

At the beginning of 2025, Microsoft announced a price increase for its Microsoft 365 software package in the Australian market. Microsoft 365 – which includes commonly-used programs   like Word, Excel, PowerPoint and Outlook – would become between 30% and 45% more expensive for Australian subscribers, depending on whether a personal or family subscription was being purchased.

Microsoft justified the price increase as reflecting the fact that its 365 software package would now include Copilot, an AI-powered chatbot and assistant.

This price increase was widely criticised by customers. Accusations of price-gouging focused on the idea that Microsoft gave its subscribers relatively short notice to either pay the increase or lose access to Microsoft 365 programs. Other users accuse Microsoft of misleading pricing, saying that the option to keep using Microsoft “Classic” – the version without Copilot and without the higher price – was only made clear to them when they tried to cancel their subscriptions.

Microsoft has defended the transparency of its pricing and stated that asking customers to   pay more for the 365 version that includes Copilot would enable Microsoft to keep delivering AI-powered innovations to its customers in the future.

Suggested Readings

https://ia.acs.org.au/article/2025/aussies-push-back-against-microsoft-365-price-hikes.html

https://www.abc.net.au/news/2025-02-25/microsoft-365-subscription-price-hike-consumer-complaints- accc/104965682

https://www.qut.edu.au/news/realfocus/microsoft-cuts-data-centre-plans-and-hikes-prices-in-push-to- make-users-carry-ai-costs

Outrage over Microsoft price hike | ABC NEWS

https://theconversation.com/microsoft-cuts-data-centre-plans-and-hikes-prices-in-push-to- make-users-carry-ai-costs-250932

Answer the following questions.

Do not copy the questions in your response. Simply include the question number (for example, Question 1A (1) and your answer for each question.

Question 1

A)  In response to Microsoft’s recent price hike,one consumer complained

"I just got a notification that my price will increase by around 30 per cent with less than three weeks' notice — I cannot simply adjust my entire family account in that time."

Discuss the economic concept at play here and detail two other factors from the course that may influence users’ ability to adjust consumption.

Suppose the marginal cost of producing a Microsoft 365 software license is $0.

The table below summarises the demand for Microsoft 365.

Suppose Microsoft can distinguish between Home and Business users.

B)  How much more would Microsoft charge for a Business license than a Home license?

C) What would consumer and producer surplus in the market be?

Suppose Microsoft cannot distinguish between Home and Business users.

D) What would consumer and producer surplus in the market be?

E)  Suppose the government is considering whether or not firms should be able to charge different prices for the same product. Discuss the trade-offs for this market case.

Question 2

Microsoft leadership would face two primary choices: maintaining the price increase or adjusting its pricing strategy.

A.  Discuss how maintaining the price increase could align with the utilitarian approach, considering the potential benefits for 1) Microsoft and its future innovation, and 2) investors.

B.   Discuss how adjusting its pricing strategy might align with the deontological approach, emphasizing fairness and duty to stakeholders (use the Caroll's pyramid in your answer).

Question 3

A. Considering the details and the facts of the subscription hike of Microsoft 365 (MS 365), one of the issues raised by the MS 365 subscribers is around fairness.

What the ACCC has to demonstrate about Microsoft conduct in order for the court to consider the conduct is unconscionable under the relevant sections of the ACL. In your answer relate specifically to facts if the Microsoft case and other cases where unconscionable conduct may have been demonstrated.

B. There are three requirements for a contract to be valid and enforceable, explain these requirements relating specifically to the contract between Microsoft and the MS 365 subscribers