Netflix must give concrete reasons for price increases in Germany in the future – and must not simply reserve any changes to the subscription costs in its own terms and conditions. The 5th Civil Senate of the Berlin Regional Court has this in one Judgment of December 20, 2019 decided (via Movie starts).
Price adjustment clause violates BGB
The Federal Association of Consumer Centers (VZBV) had previously filed a lawsuit against Netflix, inter alia, for omission in relation to a wording in the general terms and conditions of the streaming service, which reads:
"(Terms of Use, Section 3.4, Price and Subscription Changes) Our subscription offer and pricing for the Netflix service may change from time to time. However, you will be notified of any changes in prices and our subscription at least 30 days prior to Offer informed. "
The VZBV had argued that this clause Inappropriately disadvantaged consumers
- The price adjustment clause is ineffective because Netflix not only compensates for concrete cost increases, but can also generate an additional profit.
- The clause violates the transparency requirement according to Section 307 (1) sentence 2 BGB because the consumer cannot predict when the cost increases will occur and to what extent they are justified.
Accordingly, Netflix may only increase prices by increased costs to mitigate, and must disclose a weighting of the costs in the price calculation. The streaming service will therefore have to adjust its own terms and conditions accordingly and must inform customers transparently about future price increases – otherwise there will be a fine of up to EUR 250,000 for each case of contravention, or alternatively a custodial sentence.
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With this decision, the court upheld VZBV's appeal against the previous judgment of the 52nd civil chamber of the Berlin Regional Court. A revision is excluded, the verdict is thus legally binding.