Tech Insider: How to avoid Microsoft’s 38% price rise, Amazon recruits New Zealand roles for Project Kuiper

You can opt out of the Microsoft 365 price rise – if you're willing to forgo the new AI tools – but Consumer says that choice is hidden. Image / 123rf

Consumer magazine is lodging a complaint with the Commerce Commission today over a Microsoft 365 price hike. Here’s the hidden way to wriggle out of it. PLUS: Amazon recruits for key New Zealand roles for its Starlink rival, Project Kuiper; a “ground truth” AWS Auckland data centre update; and Sir Peter Beck gets the mother of all Christmas bonuses.

Microsoft is hiking the prices for the Personal and Family editions of its 365 product – which includes Word, Excel, PowerPoint, Outlook, OneDrive cloud storage and the tech giant’s new Copilot AI (artificial intelligence) tool for suggesting or creating content.

I’ve just had an email from Microsoft informing me the price of my 365 Family annual sub will “change” from $179 to $229 (a 28% increase) when it renews in May. That comes on top of an 8.5% increase last year.

The price of a 365 Personal subscription is rising from $129 to $179 (a 38% increase).

The cycle of increases began in November and will hit when your annual renewal comes up, if you’ve taken the cheaper annual option.

Consumer has taken issue with the way the price increase was framed – specifically that the email announcing it makes no mention that you can in fact opt out of the price increase, which it sees as a stealth price rise – dubbing it a “dark pattern; when a user interface is designed to trick users into making choices they wouldn’t otherwise make”.

You only see the opt-out option if you click “Cancel subscription” on your 365 management page (accessible through account.microsoft.com/services/microsoft365).

You then see the option for a “Classic” Family or Personal plan at your old pricing – but without the two new AI features: Copilot, plus AI image generation through Microsoft’s Designer app. The trick only works if you bought 365 online rather than in a retail store.

I also got the option to switch to paying $23 per month or $276 per year.

If you click "Cancel my subscription", you get the option to keep your old Microsoft 365 pricing – albeit without the new AI features. Notably, you're restricted to 60 prompts per month, and only the owner of a family plan gets access to the AI tools.

The terms and conditions reveal limitations for the Personal and Family versions. You are restricted to 60 credits – or 60 AI prompts – per month. And if you’re on a Family subscription, only the owner of the sub gets access to the credits – not the other up-to-five people sharing the account.

For unfettered access, you need to take a separate $37 per user per month Copilot Pro subscription.

There is value in Copilot. We use a corporate version here at Herald publisher NZME, along with a range of AI tools from other vendors.

However, Consumer is not arguing the merits of the new AI tech but the fact it’s not obvious, in its view, that you can opt out of the new feature and the attendant extra cost.

“Frankly, we feel this is a flagrant breach of goodwill and trust for Microsoft’s customers,” Consumer product tester Nick Gelling wrote on November 29.

“It’s unethical for a company to automatically upgrade all its customers to a more expensive product they didn’t ask for – especially when customers aren’t even informed they have the ability to opt out. It’s also potentially misleading and a breach of the Fair Trading Act. We’re preparing a formal request to the Commerce Commission to investigate this practice.”

This morning, Consumer communications and campaigns advisor Abby Damen provided this update: “We are lodging our letter of complaint with ComCom today.”

Shortly before Christmas – as it opened its $1 billion new data centre in West Auckland – Microsoft commented on what the reasons were for the 365 price increase. The firm said in a statement: “To reflect the value we’ve added over the past decade and enable us to deliver new innovations for years to come, we’re increasing the prices of Microsoft 365 Personal and Family. The price increase will apply to existing subscribers upon their next renewal.”

The Herald asked Microsoft for comment about Consumer’s “breach of goodwill” complaint.

The firm did not immediately respond to questions about the option to keep current pricing being hidden, but reiterated that new features had been added to all 365 apps over the past 12 months and added, “We take user feedback seriously and we are continuously working on providing options to customise these experiences.”

A spokesman also noted, “The changes are for 365 Personal and Family Subscriptions only. They do not impact business or enterprise customers who have separate licensing agreements with Microsoft”.

Amazon recruits for Project Kuiper roles

Last September, Tech Insider revealed Amazon-owned Project Kuiper had received Overseas Investment Office permission to buy land in New Zealand at an undisclosed location and be granted eight satellite transmission licences – presumably in preparation for local ground stations.

Now there’s another sign that Amazon is gearing things up. Four Australia-New Zealand roles are being advertised: systems development engineer – ground infrastructure, senior product manager and (intriguingly given rival Starlink’s penchant for telco partnerships) a principal B2B (business-to-business) marketing lead and a consumer partnerships lead.

Amazon plans to build a constellation of more than 3200 LEO (low-earth orbit) satellites to compete with Elon Musk’s Starlink (which has six ground stations dotted around the country at Puwera, Te Hana, Clevedon, Hinds, Cromwell and Awarua).

It currently only has two prototype satellites in orbit, but has a multibillion-dollar budget for rapid expansion.

Industry scuttlebutt holds that Rocket Lab’s newly expanded satellite component-making operation in Auckland is making reaction wheels for Project Kuiper, but neither side has commented.

Speaking of Amazon, the tech giant’s Amazon Web Services (AWS) division recently told the Herald it would open its first hyperscale data centre this year.

The opening was originally planned for 2024 but was derailed by drainage issues at the site.

Tech Insider visited the Westgate site where the AWS data centre will rise (Amazon says it’s a secret, but it has been published in property records and a map made by New Zealand Retail Property Group – below.

A New Zealand Retail Property Group map of existing and new projects at the firm's Westgate Town Centre development in northwest Auckland. Image / NZRPG website

Tech Insider visited the site over the Christmas break. It’s literally across the street from DCI and Microsoft’s recently completed data centres.

That state of it: a few concrete slabs, a lot of gravel and a couple of portacabins indicated that work would have to proceed at a brisk pace to meet Amazon’s deadline.

Amazon and Microsoft both say they’ll have more than one data centre in Auckland – but that doesn’t necessarily mean building more facilities as wholesale agreements with DCI and half Infratil-owned CDC are possible, going by overseas arrangements (none of the parties will comment on the New Zealand situation).

AWS says it will spend $8.7b over 10 years on its first New Zealand data centres.

Beck granted US$21m in Rocket Lab stock

How was your Christmas? In December, Rocket Lab granted its founder, chief executive, president and chairman Sir Peter Beck 789,373 shares worth US$21,242,027 ($38 million) at Friday’s closing price (the stock won’t vest until March).

The holiday bonus came after a huge year for the firm, which saw its stock rise 361% as it confirmed it had signed its first customers for its giant Neutron Rocket (due for launch later this year), bagged tens of millions in Biden “Chips Act” funding and was shortlisted for Nasa’s US$4b Mars rock retrieval mission, among other milestones.

And 2025 has started with a bang, so to speak, with Rocket Lab announcing on January 9 that it has successfully completed a design review for one of the largest contracts in its US$1b ($1.8b) pipeline – a project for the US military’s Space Development Agency.

“This milestone marks a critical step in Rocket Lab’s mission as a prime contractor to deliver 18 advanced data transport satellites for the US Department of Defence’s Proliferated Warfighter Space Architecture (PWSA),” the company said.

Beck owns 10.5% of the firm, after selling down from 11.3% in September last year to capitalise his charitable foundation.

The transaction netted him US$20.23m.

The recent share surge, which has taken Rocket Lab’s market cap to US$13.5b, means his stake is now worth about US$1.4b. That’s a cool $2.3b in our dollars.

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.