Price Hikes at Netflix and Spotify: A Blow for Providers and Consumers Alike
Streaming giants Netflix and Spotify are having a tough time in Germany, following a recent ruling by the Berlin Court of Appeal. The court declared that price adjustment clauses used by the streaming providers were invalid, and unilateral price adjustments require customer consent. This came after lawsuits brought by the German Federation of Consumer Organizations (vzbv) against Spotify and Netflix before the Berlin Regional Court.
The Ruling and its Implications
Jana Brockfeld, a consultant in the vzbv's law enforcement team, described the decision as a landmark victory for consumers. According to the court, Spotify and Netflix cannot unilaterally adjust their prices without the customers' consent. This ruling could potentially put an end to future unilateral price increases by streaming services in Germany.
However, the rulings are not yet legally binding. There's a possibility of appeals, which could delay the end of unilateral price increases.
Money Back for Netflix Customers
Netflix customers who started a premium subscription by the end of 2016 have paid up to 426 euros just for price increases. Experts have provided a sample letter with detailed instructions for refund claims from Netflix customers. In case of disputes, the provider must prove that customers have consented in each case.
DAZN, Amazon Prime, and the General Principle
Germany has specific regulations regarding price increases for streaming services. Serving as precedents are cases like the DAZN case, where the Munich Higher Regional Court ruled that DAZN's price adjustment clause was invalid. Other providers like Amazon Prime have also been hit with similar rulings, as the Düsseldorf Regional Court determined that Amazon's unilateral price increase was invalid.
The general principle is that German courts consistently rule that providers of subscription services must ask customers for explicit consent before increasing their prices. Informing users of impending price increases is not sufficient. Consumer advice centers in Germany have achieved success with similar proceedings against unilateral price increase clauses.
Enrichment
Currently, streaming services in Germany must obtain explicit consent from users before implementing price increases. Unilateral price hikes without consent are considered invalid, and they can lead to class action lawsuits and legal challenges. This scenario is a result of successful proceedings against companies like Netflix, Spotify, and Sony, as well as cases like DAZN and Amazon Prime. Consumer organizations, such as the vzbv, continue advocating for fairer and more transparent fee structures for users.
