Disney sued by Consumer Rights Group over Disney+ price increase
As anyone who subscribes to a video streaming service will know all too well, subscription prices tend to increase over time. In fact, over the past few weeks Netflix and Amazon Prime have both increased their respective monthly subscription prices. It hardly came as a shock when Disney recently announced that they would also be raising subscription prices for their Disney+ streaming service from their aggressive launch levels.
Just because it wasn’t surprising, however, hasn’t stopped a major consumer advisory group in Germany from launching legal action against Disney over the Disney+ price hike.
As first reported by 4K Filme, the German Verbraucherzentrale Brandenburg (VZB) Consumer Advocacy Group has initiated legal action against Disney on the grounds that the apparent provision in the Disney+ contract to raise prices unilaterally and without any restrictions at the expense of customers is (according to a translation from the original German wording) ‘a clear violation of the provisions of the law’.
VZB has issued a press release about its case against Disney in which it claims that it previously warned the Walt Disney Company (Benelux) about the potential legal problems surrounding the Disney+ price increases, and since the company did not respond with any cease and desist orders VZB has now started proceedings at the Potsdam District Court.
VZB further explains in its press release that it was prompted to act on a message to its online complaints portal from a Disney+ subscriber who was upset about the almost 30% price increase he was now expected to pay for his annual Disney+ subscription. When VZB investigated the grounds for this complaint, it claims to have found that the Disney+ subscription terms reserve the right to change prices effective from the start of a new subscription period with 30 days’ notice and, crucially, no mention of what factors a price change might depend on .
“With the clause,” says Michele Scherer, VZB’s digital expert, “the supplier reserves the right to change prices unilaterally and without restrictions. This means that consumers cannot estimate possible price increases when entering into an agreement. In our opinion, this is not right.”
The VZB statement goes on to say that while consumers had the option to reject the price change, it was not clear what the specific consequences of the rejection might be. Moreover, VZB maintains that price clauses must mention cost elements that may lead to an increase; they can not only enable companies to increase their profits.
Disney has yet to give their initial response to the VZB suit, but I’ll keep an eye on this one to see if it leads anywhere.