Spotify loses in court: Price adjustments are not permitted

Last year there was record inflation in Germany, so consumer prices rose significantly. Fueled by the war in Ukraine, inflation only knows one direction, so that a number of products, such as the new iPhone 14, have become more expensive. Spotify wanted to obtain the right to carry out possible price increases. Now the district court of Berlin has decided that the changed terms of use not permitted are. On June 28, the judges pronounced a judgment on a lawsuit brought by the Federal Association of Consumer Organizations against Spotify (reference number: 52 O 296/21). The case has now been made public.

Pass on price increases, but not price decreases

The Swedish company had already changed its terms of use in May 2021 and inserted a corresponding clause. The streaming provider could change subscription fees and other prices to offset the increased overall cost of providing Spotify services, the company said. According to the judges, this clause is inadmissible because subscribers could be disadvantaged. Finally, the terms of use do not provide for a price reduction as a result of reduced costs.

Spotify’s argument that costs would only go up anyway isn’t accurate. For example, there was a reduction in sales tax in the second half of 2020, which Spotify would not have passed on to paying subscribers with the changed terms of use. Spotify has appealed against the judgment, which is not yet final. In the first quarter of 2022 alone, the audio streaming service Spotify had 182 million paying premium members. A subscription costs at least EUR 9.99 per month, and voucher cards can also be purchased. Alternatively, Spotify can also be used free of charge with commercial breaks.

Also worth reading: Spotify brings its own play button for premium subscribers

Collection of illegal price adjustments on Spotify:

• The Federal Consumer Association has filed a lawsuit against Spotify. The background to this is the terms of use of the audio streaming service, which were changed in May 2021.
• A clause states that the streaming provider may change subscription fees and other prices to offset the increased overall cost of providing Spotify services.
• According to the Federal Association of Consumers, this is unequal treatment of Spotify subscribers. Especially since there is no price reduction if the costs for the company decrease.
• The Berlin Regional Court agreed with the Federal Association of Consumer Organizations. Spotify has appealed the verdict.

Source: via golem