Netflix has suffered a major setback from the Italian court. The court has declared the increased subscription prices between 2017 and 2024 illegal and has ordered the company to return the money to the users. This decision is expected to provide relief to millions of users and is being considered as a big message for the entire OTT industry.
Court’s decision: Why was the price increase declared illegal?
According to Reuters report, the court in Rome, Italy said that Netflix repeatedly increased prices without giving any solid reason. This matter came to light after a complaint by consumer organization Movimento Consumatori. The Court held that:
- The clear reason for increasing the price was not mentioned in the contract.
- This is a violation of consumer rights
- This step is against consumer law
Now after this decision, the way has been cleared for the users to get refund and relief in the plan.
How much refund will users get?
According to the report, Netflix:
- Prices increased in 2017, 2019, 2021 and 2024
- Total increase of about 8 euros per month in premium plan
- An increase of about 4 euros per month in the Standard plan
In such:
Premium users who have been connected for a long time can get a refund of up to 500 euros (about ₹ 53,000). Standard users can get back up to 250 euros. This amount can prove to be a big relief for middle class users.
Netflix will have to run an information campaign
The court not only ordered a refund, but also directed Netflix to conduct a public information campaign within 90 days. To the company:
- You will have to provide information on your website
- Notice will have to be published in major newspapers
If the company does not do this, it will have to pay a fine of 700 euros daily.
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What options does Netflix have now?
Netflix has not accepted the decision and said it will appeal it. The company claims that it has always followed local laws and respects the rights of users. But if a large number of users claim refund, the company may have to suffer huge financial losses.
What is the signal for OTT industry?
This decision is not limited to Netflix only, but is a warning to the entire OTT industry that increasing prices without transparency can be costly. This case can become an example in the times to come.
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