Microsoft has defended increasing the prices of its Microsoft 365 subscriptions after Australians criticised the changes and helped each other find a way to avoid paying more for the company’s productivity software.

The price rises, first announced in November, have been justified by Microsoft as largely the result of new artificial intelligence features being added to the service — namely its generative AI chatbot Copilot and its image generator called Designer.

Microsoft 365 also includes popular apps such as Word, PowerPoint, Excel, and Outlook.

A personal licence of Microsoft 365 is increasing from $109 per year to $159 per year in Australia, while a family subscription is rising from $139 per year to $179 per year — increases of roughly 45 per cent and 30 per cent, respectively.

Microsoft 365 users share how to avoid higher fees

After a concerned Microsoft 365 subscriber posted the email they received about the increase on Reddit on Thursday, they received hundreds of replies from other disgruntled users.

Soon after, a commenter claimed they had “found a work around” to avoid being automatically upgraded to a more expensive plan with Microsoft's AI features.

The user said that attempting to cancel their subscription caused Microsoft’s website to give them the option of reverting to a “Classic” subscription, which did not contain the new AI features and remained at a lower price.

In a statement to Information Age on Monday, a Microsoft spokesperson said, “Existing subscribers with recurring billing enabled can switch to plans without Copilot or AI credits like our Microsoft 365 Basic plan or, for a limited time, to Microsoft 365 Personal Classic or Microsoft 365 Family Classic plans.

“These plans include the previously available feature offerings and will continue to be supported.”


Microsoft 365 users have been offered a "classic" plan without AI features if they attempt to cancel their subscription. Image: aPragmaticDreamer / Reddit

While many customers reported being able to switch to a Classic plan to save money, a small number said they did not see that option available, potentially due to having subscribed through a third party.

Some users accused Microsoft of not making it clear enough that automatically moving to more expensive plans with AI features could be avoided, slamming the company for “burying and hiding this”.

“It SHOULD have been mentioned in the email,” one user wrote on Reddit.

“Their AI crap really should be opt-in, instead of opt-out.”

“It should be illegal to up the price of a subscription and automatically enroll everyone on that when a cheaper sub (or existing sub) exists,” wrote another.

“What a f***ing scam.”

Microsoft said its price changes for Microsoft 365 were for personal and family subscriptions only and would not impact its business or enterprise customers.

Microsoft tests price rises in Asia-Pacific

Price rises have been announced for Microsoft 365 customers in Australia, New Zealand, Singapore, Malaysia, Taiwan, and Thailand, who should see the changes at their next renewal.

Microsoft’s spokesperson said the company made the decision to raise prices in those six markets “to listen, learn, and improve”.

They said the price changes reflected the list of features Microsoft had added to Microsoft 365 over the past 12 years.

“We understand that our customers have a variety of needs and budgets, and we’re committed to providing options,” they said.


Microsoft 365 applications inlude the likes of Word, Excel, PowerPoint, and Outlook. Image: Shutterstock

In emails to users posted on social media, Microsoft also said the changes would enable it to “deliver new innovations for years to come”, including more AI features.

While many technology companies and streaming services have announced price increases over recent years, some have gone more smoothly than others.

Australian technology company Canva also received some backlash last year after it announced substantial price increases to its design software subscriptions.