Netflix to repay German customers after illegal price hikes

The streaming service Netflix has suffered a defeat in court due to unlawful price increases. On Friday, the Cologne Regional Court declared the service's price increases in 2017, 2019 and 2022 invalid in the second instance. The plaintiff consumer is therefore entitled to repayments. However, other affected parties would have to enforce repayment claims themselves.

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The dispute centered on a Netflix subscription that started at EUR 11.99 but was gradually increased over four years to EUR 17.99. The key legal question was whether clicking a button labeled "Agree to Price Increase" counted as valid consent from customers. The court ruled that simply pressing the button did not clearly communicate an agreement to the contract change. As a result, Netflix was ordered to reimburse the affected customer around EUR 200.

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In detail, the court criticized the company's approach to the price changes: When using the Netflix app, the customer was shown a button informing them of the price increases and asking them to agree to the increase. In this presentation, it was made credible to the customer that he was only being informed about the unilateral contract changes, the court explained.

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For a price adjustment, however, the company must formally make an offer, which the customer then agrees to. “In this case, the pop-up window with the consent button was not sufficient for the court,” explained telecommunications expert Erol Burak Tergek from the North Rhine-Westphalia consumer advice center.

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The regional court also ruled that the conditions for a unilateral contract amendment were not met. Netflix had referred to a corresponding clause in the General Terms and Conditions, according to which the company “from time to time” and “at our reasonable discretion” due to cost changes. However, the court stated that this provision "unreasonably" disadvantaged the consumer.

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The plaintiff Netflix customer is now entitled to refunds for the price increases from 2019. The court rejected the claims for 2017 and 2018 as time-barred. Thousands of customers in Germany were affected by Netflix's price adjustments. Nevertheless, the ruling from Cologne "only applies directly between the parties and not for all Netflix customers", explained Tergek. "Those affected in a similar situation must therefore independently reclaim overpayments following an ineffective price increase and sue for them if necessary."