Microsoft 365 users in Australia and several other countries are currently experiencing significant price increases. This is due to a new, more expensive subscription model with new AI features in the 365 applications. Microsoft plans to transition all old 365 subscriptions in these affected countries to this new model. Although customers have the option to remain with their cheaper old subscription model, Microsoft reportedly does not make this clear. Consumer advocates are raising concerns.
Many users were caught off guard by these changes. Microsoft had announced price increases for various products back in November, primarily affecting business applications and companies. However, in Australia, New Zealand, Malaysia, Singapore, Taiwan, and Thailand, the changes are now impacting private users. The introduction of AI applications like Microsoft Copilot and Microsoft Designer is behind this move. Copilot is an AI chatbot based on OpenAI’s ChatGPT 4 model, while Designer is an AI-powered graphic and image editing software. Microsoft announced this plan in early November in a press release, mentioning the price increases. Many users in the affected regions overlooked this announcement and were surprised by the changes.
However, there is a way to avoid the 365 price increase. Microsoft has stated that the new software package, with AI applications and higher prices, will be introduced for all subscribers of 365 Personal and 365 Family at the next automatic renewal. For instance, 365 Personal subscribers in New Zealand will pay 179 New Zealand dollars per year, up from the previous 129 dollars. Those with 365 Family will pay 229 dollars instead of 179 dollars. According to a Mastodon user and the New Zealand consumer magazine Consumer, there is a hidden option to avoid the higher prices and new programs: by pretending to cancel their subscription.
To do this, users must access the account area on the Microsoft website and click on “Cancel Subscription” under “Subscription.” Only then, according to Consumer, does a menu appear offering “Microsoft 365 Personal Classic” as an alternative to the existing, automatically transitioned, more expensive new model. The Classic subscription is significantly cheaper at 129 dollars per year than the regular “Microsoft 365 Personal” option.
This hidden opt-out also works for new customers. However, they must first subscribe at the new (higher) prices, then choose the cancellation option as described, and be offered the Classic subscription. Those who purchased their subscription at old prices from a retail store are not affected by the price increases until the subscription ends. Those who bought their 365 subscription through an external app store are at a disadvantage, as they only have the option to cancel and get a new subscription directly from Microsoft.
Consumer criticizes Microsoft’s lack of transparency with its customers on this issue, calling it a breach of trust and a clear example of “Dark Patterns.” This term describes tactics that lead customers to make decisions they normally wouldn’t through misleading user interfaces. Several Mastodon users suspect Microsoft is acting illegally, and one user has reportedly filed a complaint with the Australian consumer protection agency.
Consumer also highlights that access to Copilot with the new subscription model is not unlimited. Subscribers have 60 tokens per month, and each AI-powered action involving Copilot uses up one token. Unused tokens expire at the end of the month, and users start with 60 tokens again at the beginning of the new month. In 365 Family, only the main user managing the subscription can use Copilot, excluding all other accounts in the subscription. Those wanting unlimited access must pay an additional 37 NZ dollars monthly for a “Copilot Pro” subscription.
The developments in the affected region could be a preview of what might happen to 365 customers elsewhere. The development of AI applications is extremely costly, even for Microsoft, and the company seems to be using price increases to generate additional revenue while encouraging customers to use the new AI-powered software. This current approach may also be a test to see how customers and regulatory authorities react.
Governments in many countries, including Germany, also use 365 software. The Society for Informatics (GI) recently criticized the German government’s continued reliance on Microsoft, warning of the risk of becoming a “digital colony.”