On October 13, 2025, a group of plaintiffs filed a class action lawsuit in the United States District Court for the Northern District of California against Microsoft, alleging that the company engaged in anticompetitive conduct that artificially inflated the price of ChatGPT subscriptions.
The named plaintiffs are individual ChatGPT Plus subscribers from multiple U.S. states who seek to represent a nationwide class of consumers who purchased the service from late 2022 onwards. The complaint centers on claims that Microsoft, as a horizontal competitor to OpenAI, entered into a secretive agreement giving it exclusive control over OpenAI’s compute infrastructure through its Azure platform.
According to the filing, Microsoft used this exclusivity to restrict the supply of compute resources to OpenAI’s products, allegedly inflating token prices by up to 200 times those of competitors and degrading service quality. Even after partially relaxing the restraint in mid-2025, Microsoft retained contractual power over OpenAI’s infrastructure, maintaining what plaintiffs describe as an ongoing “sword of Damocles” over the market.
Additionally, the plaintiffs contend that this conduct violated Section 1 of the Sherman Antitrust Act and resulted in significant overcharges for millions of ChatGPT users, particularly those subscribing to ChatGPT Plus.
Consequently, in the prayer for relief, the lawsuit seeks treble damages, restitution, injunctive relief to bar Microsoft from imposing such restraints in the future, attorneys’ fees, and other appropriate remedies under federal and state antitrust laws. The plaintiffs also ask the court to dismantle Microsoft’s agreement over OpenAI’s compute supply and to restore competitive conditions in the consumer generative AI market.
Allegations In Detail
The plaintiffs allege that Microsoft and OpenAI, though “horizontal competitors in the Consumer Generative AI Market,” entered into a secretive agreement that gave Microsoft control over the supply of compute to OpenAI’s generative AI products. Through an exclusivity clause, Microsoft required OpenAI to “exclusively use Microsoft (specifically, its Azure cloud service) for compute services,” effectively allowing it to “restrict the output of its horizontal competitor.”
As demand for ChatGPT surged, Microsoft allegedly “exercised its control over compute supply to restrict output,” causing “massive price inflation for OpenAI tokens”, the price charged for API users to access OpenAI models, and visible degradations in “quality, speed, sophistication, and product choice.”
The plaintiffs further argue that this artificial scarcity was strategic, enabling Microsoft to extract “supracompetitive profits from OpenAI’s customers” while advancing its own competing products, including Copilot. The complaint claims that OpenAI’s ChatGPT prices were “100 to 200 times competitors’ prices on a per-token…
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