After raising subscription prices, the company did not notify users of the option to keep the same subscription price without the inclusion of AI features.
Microsoft has been accused of using “dark patterns” to hide more affordable subscriptions to its productivity suite while pushing its Copilot AI product onto customers.
The tech giant announced big price hikes for its refreshed Microsoft 365 Personal and Microsoft 365 Family plans in mid-January 2025.
The new packages include limited access to Microsoft’s Copilot artificial intelligence (AI) software and Designer tool, joining the existing productivity apps — Word, Excel, PowerPoint, OneNote, and Outlook.
In South Africa, pricing of the Personal plan has jumped 45.9%, with the monthly price hiked from R109 to R159 ($8,52) and annual price increasing from R1,099 to R1,599 ($85,6).
The Family plan’s price increased from R139 to R199 ($10,6) per month and from R1,399 to R1,999 ($107) per year, a jump of 43.2%.
In a blog post on 16 January 2025, Microsoft said the prices were increased “to reflect the extensive subscription benefits” it added over 12 years and to “deliver new innovations for years to come.”
The 12 years refers to the period in which the company has not increased prices on its Microsoft 365 products in the US, despite making significant improvements to the software.
South Africa and other markets have seen several price hikes in the company’s products in the past 12 years, including in 2014, 2020, and 2023.
That being said, the rand has weakened substantially against the dollar during the same period. Microsoft has consistently used the exchange rate changes as the reasoning for its local price adjustments.
The big problem with Microsoft’s latest adjustment is that its email notices and media statements failed to mention that customers could keep their old plans and prices with new Microsoft 365 “Classic” options.
Consumer NZ product test writer Nick Gelling discovered there was a way to circumvent the adjustments and retain the old package and pricing in November, when Microsoft applied the changes to its products in New Zealand.
Gelling explained the option was well hidden and the only way to get it was to call Microsoft’s bluff by pretending to want to cancel your subscription.
After going to account.microsoft.com, selecting “Manage”, and “Cancel subscription,” the user will be presented with the Classic options with the same prices and product selections as their existing plans.
Gelling also found that new subscribers to Microsoft 365 Personal or Microsoft 365 Family could immediately cancel their plans after sign-up and get the Classic options and avoid the transition to the new products.
Microsoft published an article on its support pages confirming the existence of the Classic option and that it could only be accessed if a user initiated the cancellation process.
However, the official Microsoft 365 product page makes no mention of these Classic subscriptions.
Dark patterns
Gelling described Microsoft’s approach as an example of a “dark pattern” and said it was likely in breach of New Zealand’s consumer laws.
South African law firm Webber Wentzel defines dark patterns as tactics used in user interface designs that manipulate users into making choices preferred by the supplier.
Dark patterns may include the following characteristics:
- Asymmetry — The seller’s user interface design deliberately draws the consumer’s attention to or focuses on particular choices or options as opposed to other less lucrative or favourable choices for the seller.
- Covert — The seller’s user interface design distracts the consumer and leads them into making an unintended decision.
- Deceptive — The seller’s user interface encourages false beliefs in consumers through affirmative misstatements, misleading statements, or omissions.
- Hides information — The user interface is designed in such a manner that it obscures or delays the presentation of necessary or relevant information to consumers.
- Restrictive — The design eliminates certain choices that should be available to consumers.
- Disparate treatment — The design targets and disadvantages certain groups of consumers through differential treatment.
Microsoft’s price adjustment strategy meets at least three of the characteristics above: it is deceptive, hides information, and is restrictive.
Veteran consumer journalist Wendy Knowler labelled Microsoft’s approach as “sneaky,” as it knew that most customers were unlikely to try and cancel if they were not aware that it opened up a more affordable alternative.
While dark patterns are banned in several countries, South Africa’s consumer legislation does not explicitly mention the practice.
However, Knowler pointed out that the Consumer Protection Act (CPA) prohibits false or misleading misrepresentations about a material fact.
“This includes the use of exaggeration, innuendo or ambiguity about a material fact ‘or failure to disclose a material fact’,”
Knwoler said.
The CPA also bars manipulating information to nudge consumers towards a specific choice, which is a type of dark pattern.
Microsoft confirmed that the Classic plans would only be available for a “limited time.” The price adjustments for existing users kick in on 18 March 2025, but it is unclear whether this will also be the date on which the Classic subscriptions will no longer be available.
Source: Mybroadband