George Keritsis claims the company's broke the promise it made to him and 22m other customers
A Netflix subscriber in the US has filed a lawsuit against the media giant for breaching its contract because Netflix raised its prices after promising not to. George Keritsis launched legal proceedings with a class action lawsuit in a California Federal Court last week, claiming that his legal battle could affect some 22 million subscribers.
“For a period of time, Netflix solicited persons to subscribe to Netflix’s streaming service by guaranteeing that Netflix would not increase monthly subscription prices as long as the subscribers maintained the subscription service continuously,” Keritsis’s complaint reads. “Netflix has broken its contract with these subscribers by unilaterally raising monthly subscription prices.”
Keritsis claims his signing up to Netflix’s service was dependent on a telephone call he made to with a company representative. He says a Netflix agent confirmed on the phone that the $7.99 monthly fee would never be increased provided that Keritsis kept up his account.
In October 2012, the rate increased to $8.68 per month, and then last month, Keritsis received an email from Netflix telling him that his “special pricing” had come to an end and his new price would be $9.99 per month. That email included a phone number for subscribers wishing to address questions to a customer service agent, so Keritsis rang it, The Hollywood Reporter claims.
“The Netflix representative stated that he could see Plaintiff’s account was ‘grandfathered in’,” states Keritsis’s legal documents, referring to a clause that essentially exempts certain persons or businesses from abiding by the rules laid out in a contract.
“Plaintiff protested that the price increase was inconsistent with the lifetime price guarantee. The Netflix representative stated that Netflix would raise prices for all grandfathered accounts. Not just plaintiff’s account,” Keritsis’s documents continued.
Now Keritsis is launching a class action suit, calling for “all persons who entered into an agreement with Netflix for a streaming plan at a subscription price that Netflix promised not to increase to as long as they continuously maintained their subscriptions” to come forward and join his case. His legal team estimates that the case could affect as many as 22m subscribers, almost half of all of Netflix’s US customers.
According to figures released by Netflix for the first quarter of 2016, the company now has 81.5m streaming subscribers around the world, with some 47m in the US. A consumer analytics firm estimated that the price increases issued by Netflix could result in the company losing more than 480,000 customers while also generating additional revenue of $520m.