If Microsoft causes you harm, the most they will ever have to pay you is either what you paid them in the last year or $10 — whichever is more. For free service users, Microsoft's maximum liability is just $10.
This analysis describes what Microsoft Copilot's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
The liability cap establishes the maximum financial exposure Microsoft accepts under the agreement, restricting recoverable damages regardless of the nature or magnitude of claimed harms. This structure defines the economic limits of the service provider's obligation to compensate users for losses arising from the agreement.
If Microsoft loses your data, breaches your privacy, or causes financial harm through any of its services including Copilot, the maximum compensation you can recover is $10 (or what you paid in the prior year), regardless of the actual damage suffered.
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"TO THE EXTENT PERMITTED BY LAW, MICROSOFT IS NOT LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES... IN NO EVENT WILL MICROSOFT'S TOTAL LIABILITY TO YOU FOR ALL DAMAGES, LOSSES, AND CAUSES OF ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT EXCEED THE GREATER OF (I) THE AMOUNT YOU PAID FOR THE SERVICE IN THE 12 MONTHS BEFORE THE DISPUTE AROSE OR (II) $10.00.— Excerpt from Microsoft Copilot's Microsoft Copilot Terms of Service
REGULATORY FRAMEWORK: This provision engages state consumer protection statutes that void unconscionable contract terms (UCC §2-302); GDPR Art. 82 which provides data subjects an independent right to compensation for damage caused by GDPR violations that cannot be contractually limited; and UK Consumer Rights Act 2015 ss.62-65 which prohibit unfair terms in consumer contracts. For EU/UK users, GDPR Art. 82 compensation rights cannot be contractually waived, making this cap unenforceable for data protection claims in those jurisdictions. The FTC has enforcement authority over unconscionable limitation of liability clauses under FTC Act Section 5.
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The liability cap establishes the maximum financial exposure Microsoft accepts under the agreement, restricting recoverable damages regardless of the nature or magnitude of claimed harms. This structure defines the economic limits of the service provider's obligation to compensate users for losses arising from the agreement.
If Microsoft loses your data, breaches your privacy, or causes financial harm through any of its services including Copilot, the maximum compensation you can recover is $10 (or what you paid in the prior year), regardless of the actual damage suffered.
No. ConductAtlas is an independent monitoring service. We are not affiliated with, endorsed by, or sponsored by Microsoft Copilot.