The streaming service Netflix granted itself the right to change the subscription prices via a contractual clause. This Netflix subscription price adjustment clause is void.
This was decided by the Berlin Regional Court after a lawsuit by the Federal Association of Consumer Organizations (vzbv) against the Dutch Netflix International BV (PDF judgment), which offers the streaming service in Germany for the American parent company.
Netflix recognized in its Terms of Service that it has the right to change subscription prices “from time to time” and “at its reasonable discretion, to reflect the impact of changes in the total costs associated with our service.”
The company cited production and license costs, costs for personnel, marketing, financing and IT systems as examples of price-influencing cost elements.
Opaque conditions for price adjustments
The Berlin Regional Court agreed with vzbv that the conditions for price adjustments are not sufficiently transparent. There must be clear and comprehensible criteria for changes in the fees so that customers can understand a price change that has been asserted or at least check its plausibility.
In view of the fact that the defendant belongs to a global group, it is unclear which costs influence the prices charged in Germany. It is not apparent that only those costs may be taken into account that has a specific connection to the costs of providing the service in Germany.
The court also objected to the lack of balance in the clause. There is a lack of clarification that Netflix is not only allowed to adjust prices upwards but is also obliged to reduce prices if costs are reduced. Netflix has appealed against the judgment before the KG Berlin (23 U 15/22).