'Arrogance is astounding': Microsoft hikes subscription prices ...

When Microsoft increased the prices of its Microsoft 365 subscriptions in Australia at the start of the year, users flocked to online forums to criticise the changes.

The company has sold the price increases as an upgrade, with new artificial intelligence features being added to Microsoft 365.

However, some users have expressed anger that it wasn't made obvious they could opt out and remain on their existing, cheaper subscriptions.

"Most of our 84 million consumer subscribers will now have access to Copilot in Word, Excel, PowerPoint, Outlook, OneNote, and the newly renamed Microsoft 365 Copilot app."

The subscription to Microsoft 365 — which includes popular apps such as Word, PowerPoint, Excel, and Outlook — now costs $159 per year in Australia for a personal licence, up from $109 per year.

The fee for a family subscription has increased from $139 per year to $179 per year.

For those on a monthly personal subscription, the price rose from $11 to $16 a month.

On Microsoft online community forums, users weren't thrilled about paying 30 to 45 per cent more without an option to easily opt out.

Microsoft Publisher, which is being phased out and won't be supported from October 2026, is not included in the new, more expensive Microsoft 365 subscription, with the AI-powered Designer in its place.

"So effectively they've taken away something to give us something else, but this doesn't justify a price increase of around 30 per cent,” one user posted in the Microsoft forum.

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Another wrote, "Clearly they are losing so much money with their investment in openAI that they are punishing every single one of their users.

"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."

A Microsoft customer who spoke to ABC News anonymously believes the action may be illegal and has put in a formal complaint to the consumer watchdog, the Australian Competition and Consumer Commission (ACCC), to investigate.

Microsoft's spokesperson said the company was "committed to adhering to the laws and regulations of every country in which we operate in, as well as providing our customers control over their experience" and that the company has "added settings to key apps like Word that allow people to disable or enable Copilot as needed".

The spokesperson said customers could switch to other plans without Copilot features or AI credits, like Microsoft 365 Basic.

Microsoft customers say they should have been asked to 'opt-in'

Australian customers can revert to Microsoft's cheaper Classic subscription, by going to their account and managing their subscription. 

After customer outrage about the price increase, a number of users created online blogs and videos explaining how Microsoft customers can do this. 

While many said they had been able to switch back to the newly named Classic plan, as one user pointed out on Reddit: "Their AI crap really should be opt-in, instead of opt-out."

While customers have complained about price gouging,  principal lawyer at Phi Finney McDonald, Joel Phibbs said if that was what was happening, that in itself would not be illegal.

But that "if a company like Microsoft raises prices aggressively like this and makes false or misleading claims about its prices, this would be illegal".

"As we are seeing in other litigation and action against big tech, like Apple and Google, the regulatory landscape in this sector and globally is still struggling to catch up to and appropriately moderate Big Tech's conduct where it is either anti competitive or otherwise not in consumer interests," he said.

Mr Phibbs noted that if a bank was increasing the rate of a loan, it would have to write to customers and be very clear about the changes and when they come into effect.

"The ACCC might look more closely at whether there has been any misleading statements or omissions by Microsoft in its roll out of these changes."

An ACCC spokesperson told ABC News the consumer watchdog cannot comment on complaints but typically has "no role in monitoring, setting or regulating prices the price of various goods or services, unless formally directed by the government".

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However, the spokesperson urged businesses to "provide clear and accurate information to consumers up-front about ongoing subscription, any automatic renewal of a contract, consumers' ability to cancel the contract, and any cancellation fees that might apply and when."

He also noted that "all businesses must comply with the requirements of the Australian Consumer Law (ACL), including through the use of subscriptions and memberships".

"Under the ACL, businesses must not engage in misleading or deceptive conduct, or make false or misleading representations to consumers in either the sign up, renewal, or cancellation stages," the ACCC spokesperson said.

"Further, the use of some terms in standard form subscription contracts could be unfair, within the meaning of the unfair contract term laws in the ACL."

In January Microsoft released its earnings for the second quarter of fiscal year 2025, ending December 31, 2024.

Earnings exceeded analyst expectations, with revenue hitting US$69.6 billion (up 12 per cent).

Its chief executive Satya Nadella noted that Microsoft's AI business had reached an annual revenue run rate of $US13 billion, up 175 per cent year-on-year.

"We are innovating across our tech stack and helping customers unlock the full ROI of AI to capture the massive opportunity ahead," he said at the time.