“But last month, Amazon changed the deal. To stream movies and TV shows without ads, Amazon customers must now pay an additional $2.99 per month… This is not fair, because these subscribers already paid for the ad-free version; these subscribers should not have to pay an additional $2.99/month for something that they already paid for.”
I was also a Stadia subscriber, and while they probably legally didn't have to, they refunded every single penny I spent on games and hardware.
I didn't know that. I watched an old movie the other day (Whisper 2007). It looked like complete shit and found that strange.
So I'm not sure there's any case here at all? Since even with annual subscriptions, it seems you can cancel at any time and get a prorated refund.
The fact is, online subscription services change their benefits/features all the time. And companies seem to handle it two ways: grandfather existing customers for the rest of their subscription period, or offer prorated refunds for people who want to cancel. And while the former is definitely going to make customers happier, I think they're both acceptable from a legal standpoint? So I'm not sure this lawsuit has any chance of succeeding at all.
Contracts are enforceable because society is much worse off if they aren’t. Imagine if your bank could arbitrarily cancel a car loan and ask for the outstanding balance back at any time simple because they felt like it.
Multiply that by everyone with an annual prime membership and your talking 1/2 billion dollars or so.
If that's 0.1% of 200 million subscribers who cancel, that's about $400K in supposed interest. Not half a billion. A rounding error for Amazon.
But interest just doesn't generally factor into small consumer "returns". If you buy shoes online and then return them 25 days later because they don't match the photos exactly, you don't get interest on that either. At these amounts, it's not worth worrying about.
Also when you return something you got the utility of the item and deprive the seller of the item for that time period. Larger up front payment for services not rendered is simply a net loss.
Of course it's relevant. If someone doesn't cancel, there's nothing being refunded, so there's no theoretical interest to be paid back. They accept that, going forwards, the deal is still worth it for them.
The refund-with-interest you brought up isn't about compensation for no longer having video without ads, it's about the remainder of your payment having been tied up during your previous usage. If you continue the subscription, that means you want to continue to keep the upfront payment in exchange for the lower annual rate. There's no interest on anything to be paid back. It wouldn't make any conceptual sense.
People doing nothing isn’t consent. ~0.1% of their customers die each month, you can’t argue the dead are accepting a new deal.
Further, if you’re unwilling to preform a full refund, they are asking if the service is worth $69.50 not the $71.59 or whatever they actually owe you. A slightly worse service for slightly less money isn’t a true test here.
> If you continue the subscription, that means you want to continue to keep the upfront payment in exchange for the lower annual rate.
Order and pay for a burger and fries from McDonalds and accepting a burger from them isn’t saying they don’t still owe you the fries.
There is no continuing a contract that’s already been broken. You can accept a new contract going forward but that’s a different question.
You were originally talking about getting a small amount of interest refunded on top of them already refunding your unused portion. And I simply pointed out that it's a negligible amount of money that doesn't really matter. Amazon is not stealing half a billion dollars from people like you claimed.
Now you seem to be talking about refunds or something, but I can't tell what. Obviously you don't get a refund for your past months of annual, because you used them already on free shipping and video-watching. And Amazon already will refund your future months if you don't like the change. That's fair. It's like when you try to order something online and then two days later they tell you it's out of stock and they aren't carrying it anymore in the future either and they refund you. A refund is acceptable compensation.
Contracts are binding, that’s the entire point. The interest bit is just one small part of that, but it’s illustrative of what gets done to compensate people for breaching a contract.
Getting out legally is no big deal. Provide services until the end of the contract and then cancel the automatic renewal until the new terms are agreed upon is the least contentious option. But obviously no company wants to do this as many dead accounts are still automatically renewing. Thus lawsuits just like this one which companies often though not always lose.
There's a big difference between a custom contract concerning billions of dollars involving teams of lawyers, and a annual consumer subscription a little over a hundred dollars.
Quite simply, you can't show any substantial damages here. Nobody got harmed because a subscription option ceased to be available (the way shareholders would have been harmed if Twitter hadn't sold).
Contract law doesn't treat all contracts equally importantly. Contracts aren't some ironclad unbreakable perfect guarantee. To go back to your example -- if you pay for a burger and fries, and then they discover they're out of fries, they don't have an obligation to deliver fries to your house tomorrow. They can just refund you.
In this particular case, it's just not a big deal. Contracts get broken all the time, and the correct legal remedy is very often simply to ensure payment for services previously rendered and a refund for any other payment. Especially if there's no provision in the contract for fines or penalties. Remember, the Twitter deal had penalties built in to the contract. Amazon's obviously doesn't.
A few dollars for one person can add up quickly in aggregate.
Again, they could have easily rolled this out as existing subscriptions expired. Further the existence of that option sets them up for meaningful penalties not simply reimbursement.
> Contracts get broken all the time, and the correct legal remedy is very often simply to ensure payment for services previously rendered and a refund for any other payment.
No. That’s often what one side offers as a low ball, but it is the legal system is who ultimately gets to decide on remedies when each side disagrees and it’s relatively rare for them to accept a partial refund of the remaining term.
Amazon could have offered a nominal refund say 1$ or say an extra week extension for free. Anyone accepting that wouldn’t have been able to sue. But the existence of a partial refund policy on its own isn’t a remedy.
This isn't some major contract between two companies where there's a pre-negotiated penalty for breaking it.
And with these kinds of small consumer transactions, nobody cares about interest.
> And with these kinds of small consumer transactions, nobody cares about interest.
Amazon defiantly cares about the ~half billion per year in interest they collect collectively on these subscriptions. It’s backed into the annual discount they are willing to give.
Balancing that benefit is the entire point of class action lawsuits. Where one person isn’t going to chase after 2$, a law firm is happy to chase after a slice of x00 million in damages. On the surface X people get some trivial payout, but society is vastly better off when companies can’t illegally nickel and dime people without any consequences.
presumably they wouldn't like it if I unilaterally decided to say, pay them $7/month instead of $8.99/month halfway through the commitment
how is it acceptable the other way round?
if they don't want to provide the service that was committed to they should refund the entire purchase amount (not just pro-rata)
So in your example, there is no difference. It would work the same both ways.
(Gym memberships sometimes won't cancel in the middle, nor will cell phone contracts that subsidize your initial phone -- but in my experience most monthly subscriptions and utilities will just cancel you.)
Even if the lawsuit is successful, I suspect it will cost Amazon much less than what they are projecting to make.
What's the point then? It appears only lawyers stand to gain from this, as usual.
As soon as fines and legal infractions are viewed merely as the 'cost of doing business', enforcing regulations becomes futile. At that point, might as well transition to a 'free for all' market rather than maintain a faux judicial system.
"lawyers stand to gain from this"
Not living in a world where bait and switch / illegal business practices are 10x as common is the benefit of class action lawsuits not the occasional random check for $1.37 or worse a coupon etc. Long term they could have rolled out adds as people resubscribe and there’s no lawsuit, and next time they may consider doing so.
Furthermore, Amazon has already written this argument with its actions: They didn't only introduce ads, they also introduced a higher-priced ad-free tier. By the Amazon's very action - which happens to be the context for this entire argument - the ability to watch without ads has a dollar value. That means the inability to watch without ads must have the inverse value, i.e. equivalent harm.
Do you know why amount is always ridiculously low. Are these lawsuits primarly for the lawyers to make a buck, I dont see how anyone else would be motivated otherwise.
You, Big Business Co, do something that injures a bunch of people for a small amount. A lawyer files a lawsuit on behalf of a purported class - i.e. "Everyone Bezos Hurt vs. Amazon". There's a whole thing about class certification and other things I don't have time to get into, but let's say the judge agrees that this is a class whose harms can be adjudicated together.
At some point, if you actually have a claim, Amazon wants to pay money for it to go away. This is an accepted part of the legal system, because US courts are adversarial courts[0]. The judge is just the referee. That means that if the plaintiff and defendant agree to take their business elsewhere, the judge can't get involved and continue to prosecute a dead case[1].
First problem: lawyers don't work for free. In fact, pretty much all of them are in massive amounts of student debt until their 40s and 50s, because their ability to command insane amounts of money for their services is priced into the cost of their education. Normally, a lawyer either gets paid by their client, or the client agrees to the lawyer taking a percentage cut of the damage award if one were to exist. Problem is, there's no client yet - we're suing on behalf of an abstract group of people that may or may not want to be involved in the case.
Second problem: we don't know who's a member of the class, or even how many people are a member of it. Settlement agreements typically involve cash payments of a fixed amount. You have to divvy that fixed amount up to an unknown number of people.
So as a result every class action settlement works like this: first, the lawyer gets a cut of the settlement, then the class splits it up however many ways. People have to respond to a settlement offer in order to be included in the class. If more people sign up than we have money for, however, then the class members are diluted. Amazon's liability does not increase just because they harmed more people than they thought.
This is, effectively, a weird kind of double protection racket, in which the person shaking Amazon down for money is also taking money from Amazon to shake them down for less so the mob (us) doesn't get as much. All of it is enabled by fairly understandable and straightforward rules being chained together to arrive at a terrible result.
[0] The opposite of this is inquisitorial courts. Inquisitorial as in NOBODY EXPECTS THE SPANISH INQUISITION!
[1] There are certain situations in which a judge can object to a settlement that is unfair to the class, but they can't outright demand the case be brought to trial.
Perhaps the plaintiffs get only a dainty payout as a result of a settlement, but their lawyers will make some decent coin, and that provides the motivation to work to prove Amazon is breaking the law.
How much ad revenue does Amazon make per Prime customer on average. Is it more or less than $2.99/month. We might find out the answer to questions like these during discovery. IIRC, in past litigation we learned that Google makes about $5.50/month per user from ads.
What is the alternative. Plaintiffs could finance their own lawsuits against Amazon. Perhaps they could recover more than $.32. But how much would they have to spend on legal fees and costs to reach a settlement. Chances are, Mr. Napoleon and the other plaintiffs are not paying anything.
People who do not appreciate being harassed by ads by Amazon can engage lawyers to work for them "for free" to stop Amazon from further harassment. Plus, those people might get a check for $.32.
What's the alternative. Keep getting harassed by Amazon and complain on HN expecting something will change. That sounds even less effective and more ridiculous than class action lawsuits and $.32 settlement checks.
They need an additive punitive damage getting everyone $100.
In any case, sensationalist headlines aside, some lawyer is gonna make a lot of money.
And I'm guessing the case will be settled so we can't just go to small claims court and sue them for 3k each.