A court in Rome has ruled that Netflix's price increases imposed on subscribers in Italy over several years, specifically in 2017, 2019, 2021, and 2024, were unlawful. As a result, the court has ordered Netflix to refund impacted customers, with potential refunds reaching up to 500 euros (approximately $576), depending on the subscription plan.
The lawsuit was initiated by the Italian consumer advocacy group Movimento Consumatori, which argued that the price hikes contravened the Consumer Code. This code is designed to safeguard consumer rights, asserting that a professional cannot unilaterally alter contract terms or service characteristics without a justified reason explicitly stated in the contract.
The court's ruling, delivered on April 1, determined that Netflix's contracts failed to adequately inform subscribers about potential future changes in pricing or terms. Since these price increases were found to lack valid justifications, the court declared them invalid and mandated refunds for affected subscribers. This ruling comes despite Netflix's practice of notifying customers 30 days in advance of price hikes and offering them the option to cancel their subscriptions to avoid increased fees.
According to Movimento Consumatori, attorneys Paolo Fiorio and Corrado Pinna noted that the unlawful increases for the premium plan between 2017 and 2024 totaled €8 per month, while the standard plan's increases amounted to €4 per month. A premium subscriber who has consistently paid for Netflix since 2017 could be eligible for a refund of around €500, whereas standard subscribers could receive approximately €250. The basic plan also experienced an increase of 2 euros in October 2024.
The court has instructed Netflix to notify millions of current and former subscribers about their refund rights within 90 days, using email, mail, its website, and Italian newspapers. Failure to comply will result in a penalty of 700 euros per day, according to reports from Il Sole 24 Ore. As of the first quarter of 2025, AGCOM, Italy’s communications authority, indicated that Netflix had 8.3 million unique users, while Movimento Consumatori estimated 5.4 million subscribers as of October.
Under Italian law, any price increases by Netflix after April 2025 will be considered legal. At that point, Netflix modified its terms to clarify that contract terms could change due to technological, security, or regulatory needs, or to provide enhancements to the service.
Demand for Price Reductions
In its announcement, Movimento Consumatori stated that Netflix must also reduce the prices of its current subscriptions by an amount equal to the unlawful increases. For instance, a premium customer who subscribed in 2017 and currently pays €19.99 would be entitled to continue receiving the same service for €11.99, while a standard customer paying €13.99 would have their cost lowered to €9.99.
If Netflix does not comply with these price reductions and refund orders, Movimento Consumatori has signaled its intention to pursue a class-action lawsuit, according to a statement from the group's president, Alessandro Mostaccio.
Netflix's Appeal
A spokesperson for Netflix has indicated that the company is appealing the court's ruling, asserting that they take consumer rights seriously and believe that their terms and conditions align with Italian law and practices.
This ruling marks a significant victory for streaming subscribers who feel that prices have spiraled out of control. Initially marketed as affordable alternatives to cable, streaming services have seen subscription costs rise dramatically, often coupled with a decline in features, content quality, and the introduction of more advertisements.
As viewers increasingly shift from traditional broadcast television to streaming, unchecked price hikes pose growing concerns. Although this ruling specifically affects Italian customers, it reflects a broader dissatisfaction among streaming subscribers worldwide regarding pricing practices. The decision may also pave the way for additional regulations targeting Netflix and similar streaming platforms in the European Union regarding past pricing alterations.
Source: Ars Technica News