Berlin Regional Court upholds the lawsuit brought by the Federation of Consumer Organizations against the streaming service Spotify

“Consumers are currently affected by price increases in many areas.
It is therefore even more important to make it clear to the providers that they must adhere to the legal requirements.
Spotify did not do this.”

Jana Brockfeld, legal officer at vzbv

The Sweden-based company had reserved in its terms of use the right to increase subscription fees and other prices in order to “compensate for the increased overall costs” of providing the streaming services. The total costs included, for example, production and license costs, personnel, administration and financing costs as well as taxes, fees and other charges. The clause did not provide for a price reduction as a result of reduced costs.

There was no obligation to pass on sunk costs

The Berlin Regional Court agreed with the vzbv's opinion that customers were disadvantaged by the streaming service's unbalanced clause. According to the case law of the Federal Court of Justice, cost reductions in price changes must be taken into account in the same way as cost increases and these must be passed on to customers according to the same standards.

The Spotify clause does not do justice to this. There is no obligation to pass on cost reductions. This means that the opportunities and risks of cost changes are unevenly distributed between companies and customers.

The company's argument that costs in the market for streaming services would only increase anyway is not correct. The company's costs also depended partly on cost elements that can decrease.

A clear example is the temporary reduction in sales tax in the second half of 2020. Spotify passed the tax reduction on to customers. However, according to the wording of the clause, the company would not have been obliged to do so.

Right of termination is not a substitute for fair price adjustment

The Berlin regional court made it clear: The customer's right to terminate the contract at any time does not compensate for the disadvantage caused by the price change clause. Customers would usually not be interested in canceling because if they change provider they will lose their saved playlists and other settings and the same content will not be available to them with another provider.

The company has appealed the regional court's decision.

Background: Price adjustment clauses in court

Whether in the banking sector, telephone and energy contracts or streaming services. Price adjustment clauses are repeatedly the subject of legal disputes between vzbv and consumer advice centers with providers. Only in December last year, the LG Berlin (52 O 157, not rk.) considered a Netflix clause that provided for the adjustment of fees to be ineffective. The price change clause of the sports streaming service DAZN, which was included in the terms of use in February 2022, is now being examined in court. The vzbv has filed a lawsuit before the Munich Regional Court I (12 O 6740/22).

Judgment of the LG Berlin dated June 28, 2022, ref. 52 O 296/21, not legally binding (appeal to the Berlin Court of Appeal, ref. 23 U 112/22)

You might also be interested in:Anyone who records music on Spotify could be blocked!

Source : vzbv


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