Price increases at Netflix and Spotify ineffective!
A blow for streaming providers Spotify and Netflix: they raised prices without their customers having to agree. The Berlin Court of Appeal has shaken up this business practice with two appeal rulings. This was preceded by lawsuits brought by the German Federation of Consumer Organizations (vzbv) against Spotify and Netflix before the Berlin Regional Court.
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Jana Brockfeld, a consultant in the vzbv's law enforcement team: "The Berlin Court of Appeal has made a landmark decision in the interests of consumers. The price change clauses of Spotify and Netflix challenged by vzbv are therefore not only inadmissible. The ruling could basically mean the end for future unilateral price increases by streaming services in Germany. According to the court, the two providers sued, Netflix and Spotify, may not unilaterally adjust their prices without customers' consent."
The two judgments against Spotify and Netflix are not yet final. Appeals are possible - and likely.
Because a lot of money is at stake for Netflix. According to Stiftung Warentest, all customers who started a Netflix premium subscription before the end of 2016 have now paid up to 426 euros just for price increases.
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The experts have provided a sample letter with detailed instructions for refund claims from Netflix customers. In the event of a dispute, the provider must prove that customers have consented in each case, according to Stiftung Warentest.
- The ruling by the Berlin Court of Appeal has potentially significant implications for streaming services like Amazon Prime, as it could challenge their ability to unilaterally increase fees without customer consent, following lawsuits against Spotify and Netflix.
- Netflix, in particular, has a significant amount to lose from this verdict, with Stiftung Warentest estimating that customers who started a premium subscription before the end of 2016 have paid up to 426 euros in price increases alone.
- In response to this court decision, Savings Pike, a financial advice organization, is recommending that Netflix customers explore the option of canceling their subscriptions and pursuing refunds for the price increases they've incurred, as per Stiftung Warentest's guidelines.
- Meanwhile, competing streaming services like Spotify and even banks have been closely monitoring this case, as the verdict could have far-reaching implications for their own business practices and customer relationships.
