Netflix cannot reserve the right to increase prices at will

The streaming company has to delete a clause according to which the subscription price can increase at any time without giving a reason. The court had objected to another practice by Netflix.

A Netflix office building in Hollywood

DThe streaming service Netflix is ​​no longer allowed to use a clause in its terms of use for Germany that allows any price increases at any time. A corresponding judgment by the Berlin Chamber Court, which the Federal Association of Consumer Organizations had won, is now legally binding. This emerges from a decision of the Federal Court of Justice (BGH), which was published in Karlsruhe on Friday. (Az. I ZR 23/20)

The clause said: “Our subscription offer and the prices for the Netflix service may change from time to time.” Subscribers would be informed of changes at least 30 days in advance. Netflix justified itself with the fact that the pricing process is highly complex and depends on supply and demand. In addition, there are fluctuations in the purchase costs for the licenses.

The Berlin Court of Appeal decided in December 2019 that a price adjustment clause can be admissible – but only if specific cost increases are passed on. These should then also be disclosed in detail. What is therefore not allowed are price increases in order to increase profits. In addition, the court had objected to the design of an order button for an online subscription that did not indicate the payment obligation clearly enough.

Revision was not allowed at that time. Netflix had tried to enforce a review process with a non-admission complaint. This complaint has now been rejected by the BGH because the amount in dispute is below the required threshold of 20,000 euros. Netflix had subsequently tried to correct it upwards – the clause had particular economic significance. According to the BGH, this should have happened before the higher court ruling.