Since the start in Germany, the costs for the Netflix subscription have increased by up to six euros. But was that illegal?
Streaming service Netflix keeps raising prices. The company last adjusted the subscription costs in Germany in 2021, and the next increase followed in the USA at the beginning of 2022. But the Berlin district court ruled that these changes were not legal. The contractual clause in Netflix’s terms of use, with which the company grants itself price increases, is inadmissible. Netflix is fighting back.
Netflix Terms of Service opaque
The Federal Association of Consumer Organizations (vzbv) filed the lawsuit against Netflix International BV in January 2021. The association accuses the company of not formulating the conditions for a price increase clearly enough. The Terms of Use state that it reserves the right to adjust subscription prices to reflect “changes in […] to reflect total costs”. Reasons can be, for example, rising costs for licenses, personnel and IT systems.
In the first instance, the Berlin Regional Court upheld the Federal Association of Consumer Organizations. The court justified the decision with the fact that the Netflix terms of use are not transparent enough and therefore users cannot understand price changes. In the case of a global company, it is not clear to what extent higher operating costs affect subscription prices. According to the regional court, Netflix would also have to lower prices if the costs for the company are lower than expected. As of now, the clause in the terms of use is too unbalanced.
Netflix has appealed the verdict to the Berlin Court of Appeal. A spokeswoman told TECHBOOK: “We obtained the approval of our members for price increases in Germany. Price increases were not based on the clause in our Terms of Use, which is the subject of the ongoing court case. The effectiveness of our price increases is therefore not in question.”
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Do users get money back now?
As reported by Stiftung Warentest, users affected by price increases can now claim money back from Netflix. Accordingly, a refund of up to 226 euros is possible if you took out the subscription before the first increase in 2017. Every additional month that Netflix charges the subscription costs, the company would have to pay back the difference. For those who took out a premium subscription before 2017 and now have to pay 17.99 euros, the difference is 6 euros. According to Stiftung Warentest, there is also interest of 4.12 percent.
Affected users can now apply for a refund with a ready-made sample letter. However, that doesn’t mean that Netflix is simply paying back money now. Since the judgment of the regional court is not yet final and Netflix has appealed, we have to wait for the decision of the Berlin Court of Appeal.