Across the Tasman, there was a similar offer. Last month, the Australian Competition and Consumer Commission called it “misleading” for some 2.7 million customers and lodged Federal Court action that could result in a penalty of up to A$50m ($56.9m).
On Thursday, Microsoft sent all affected Australian and New Zealand customers an apology email that included the option to downgrade to a “Classic plan” with their old pricing (and no Copilot) and claim a refund for the higher price they had paid in the intervening months since November 2024. It could be claimed by clicking a link at the bottom of the email.
But a blizzard of readers complained the link took them to a page that demanded an Australian billing address they could not supply.
Those who tried online chat support found themselves in a 1000-plus queue, with phone support drowning in an hours-long backlog.
Second email also duff
Later the same day and over Friday, Microsoft sent a “corrected” email. But it again sent Kiwis to the Australian billing site or threw up a garbled configuration error message.
A Microsoft spokesman said it was a “large operation with a lot of moving parts”. The glitches would be addressed as soon as possible.
Third time’s the charm
Microsoft then had a third stab at the refund email over Saturday and today.
Various readers say it’s finally working (and the link worked for this reporter and Microsoft 365 Family subscriber).
Cheaper annual option added
The third email (the Herald has sighted all three) also adds a new paragraph saying customers can switch to an annual plan if they are on monthly billing, which is more expensive.
After the first two emails, reader Chris Henwood complained he only saw the option to switch back to the “Classic” 365 Family plan for $18 a month — or $216 per year, higher than the $179 he was paying before the price increase.
‘May not receive new features’
So what are readers still irked about? Auckland man Michael Davison was among those who noted that shifting to the cheaper “Classic” version of 365 Family or 365 Personal not only saw the loss of Copilot as expected, but came with a Microsoft warning that their Classic edition of 365 “May not receive new feature updates”).
Davison said it was not clear if the Classic editions would receive security updates. Other readers were also confused. A Microsoft spokesman said security updates would be included.
Still confusing, no confirmation
Reader Dr Ann McEwan pointed out that although the process now works, the first screen you see (see screen grabs above) does not make it clear there will be a refund for the higher amount paid since November 2024 if you switch to “Classic”.
If do still click through to the next screen you can claim the refund. But McEwan was still annoyed that there was no confirmation.
“The only way me — and everyone else — is going to know if the refund has indeed been accepted and processed is to keep checking on the relevant bank account,” she said.
” is surprising that the mighty tech giant cannot come up with a better and more responsive system.”
Only one family member gets Copilot
Another reader, Wayne Smith, highlighted that for those who chose to stay with the new, more expensive version of 365 Family, only the person who pays the bill gets access to Copilot (a family plan can have up to six members) — and with time, feature and usage-credit restrictions at that.
The Copilot limitation is not new with this week’s offer. AI features have always been restricted 365 under the Family plan.
Aussie watchdog pushes on with case
Microsoft did not reference the ACCC’s legal action, lodged last month and still awaiting a first hearing, in its communication with customers and media.
“Microsoft’s recent offer to its customers does not arise from a settlement of the ACCC’s court action,” Australian Competition and Consumer Commission chairwoman Gina Cass-Gottlieb said in a statement to the Herald.
“We continue to seek penalties, injunctions, declarations, effective consumer redress, and costs in court,” Cass-Gottlieb said.
ComCom: Contact us
Commerce Commission fair trading and competition general manager Vanessa Horne said, “The Commission is aware of concerns about Microsoft 365 subscriptions. In February this year, we provided information to Microsoft New Zealand, outlining that we had received complaints that potentially raised issues under the Fair Trading Act. ”
Horne added, “We continue to assess enquiries as we receive them and encourage consumers to contact us if they have concerns.
“There are no plans at this stage to conduct a formal investigation and we will continue to monitor the ACCC enforcement action.”
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
