VPN firm says it didn't know customers had lifetime subscriptions, cancels them | Hacker News Reader

VPN firm says it didn't know customers had lifetime subscriptions, cancels them

arstechnica.com

46 pointsmaxloh30 comments

> The message noted that VPNSecure was acquired in 2023, “including the technology, domain, and customer database—but not the liabilities.”

Next time you see a cop on the street, you should say that you didn't purchase the liabilities when you bought drugs around the corner.

How is this not prosecuted immediately?

And any promise like "we won't sell your data and where you browse" is probably also a liability. Something to think about...

Bayer is trying to do the same thing after purchasing Monsanto. Same at Dow after the acquisition of Union Carbide.

Despicable

I don't know how this can be legal at all, the liabilities are against the company and not the owners - and nothing changed about the company. When they purchased the company, it's name/trademark, the customer base, software, etc, they also purchased the liabilities. The only way I can think you can avoid purchasing the liabilities is to go into bankruptcy.

If this is allowed to sit, then any small/medium tech company could promise the world to their customers, then just "sell" the company to a family member without the "liabilities" and there would be no recourse.

That all said, I'm launching my new company "infinite money glitch". For 0.1 BTC for a life time subscription we'll send you 0.01 BTC back every month. Don't worry about the sale of the company planned in a few months to my cousin, trust me bro.

It is possible they bought the domain name, trademarks, code, database etc. from the company but NOT the company.

However, if they have also had contracts with customers assigned to them I would have thought they would have to fulfil their side of the contract.

It's not just the domain, trademarks, code, database, etc, but also the customers and their contracts (accept the ones they didn't want). I think in a court it could easily be argued that it was a purchase of the company by a different name.

And their argument is that they were not made aware of these contracts, which to me sounds like the new owners should be suing the old owners for lack of responsible disclosure. Unless of course they signed away this right as part of the contract, or they were aware and don't have a leg to stand on.

In any case, this is super fishy.

Yes, definitely fishy, and I think you are probably right because customers had continuity of service without agreeing to new contracts.

It seems really unlikely that they have been assigned the contracts but not these particular contracts.

I think what interests me the most about this is what exactly is the cause of the liability here, assuming that the product name and company entity wasn't sold off to the current owner.

Is it the customer database?

Is it the IP / domain of the server?

Is it the website that promised it and hosted the contract?

Is it the ownership of the app code rights?

Because if you think more about it, there is some potential gap here in copyleft licenses which might need to be fixed to protect projects against companies abusing this methodology.

Should we tie liabilities to contracts therefore to customer data instead of apps and codes of apps? Is this a glitch in the democratic law that needs to be fixed by the legislatives?

In European law liabilities are tied to the legal entities, meaning that there is a transitioning phase of 5 years of the liquidation process until an entity can be sold off by the liquidator, and within that time frame customers must file their complaints/liabilities against the legal entity if e.g. they want their money back. That is unless a judicative / court decides otherwise and puts responsibility onto the owners if there is illegal ownership behavior (e.g. fraud) that was provable.

> If this is allowed to sit, then any small/medium tech company could promise the world to their customers, then just "sell" the company to a family member without the "liabilities" and there would be no recourse.

Yes, this is very likely the outcome. It will just be another perk in the consequence-free world of corporate governance.

When you buy a company you buy all of its contractual obligations. You don't get to choose to not honor some of them without legal repercussions.

They're saying they didn't buy the company - just some assets they liked, among them an intangible one: the brand...

Yes, this is it. What is a company? Can you buy all the fun stuff and leave the liabilities?

For unencumbered assets I don't see why not, but extending this logic to the brand seems fraudulent: It's unlike other assets because the (original) company crafted it to represent the whole service in the mind of the customer.

Yes, I agree. But I can see how it's nebulous if you peer closely enough that you can't see the wood for the trees.

I’m curious to know what the announcements to existing customers said when they were transferred to the new company. I doubt it read: “the company you signed up with is bankrupt, but we cherry-picked its assets - want to go with us?”

The company that bought it is owned by the same guy. He knows it's bullshit.

That’s true, which is often a reason that people don't buy failing companies at all, instead buying selected assets (including things like the trademarks and brands) and letting the actual original company go out of business.

This can happen in bankruptcy, particularly, but that's not the only way it happens.

yes, what happened to due diligence? sounds like a BS excuse to cancel the subs.

They did due diligence.

They're lying.

Get away from lifetime deals of services that have monthly spendings, like VPN providers, that pay for dedicated servers and bandwidth on a monthly basis.

I never got lifetime subscriptions even when it would've made financial sense. What defines a lifetime? Definitely not my lifetime... Offering them is a way to raise quick capital in my mind, it's not an economical benefit to them, it's a company in need of cash. And that possibly implies something about the expected lifetime of the lifetime subscription.

Lifetime is always product or company lifetime

I'll give another lens for why lifetime subscriptions often make sense. Places to consider them:

* Non-profits

* Clubs

* Academic organizations

* Educational / semi-educational companies

* ...

The key thing to remember is that the whole of the universe isn't transactional.

And the right thing to do for "an [organization] in need of cash," if you'd like to see them continue, might be to... give them cash. It might also be the right thing if you'd like an organization to be able to bootstrap and not be under the pressure of investors. There are fine reasons to keep some organizations private and customer-funded (especially if the founder has a strong moral backbone).

Lifetime subscriptions cost just $40 ? That really rings the "to good to be true" bell. Why would a VPN company do that. I have seen deals like this for 5 years, but not lifetime.

Anyway I wonder what the EUL said, was there tiny print that stated something like "we can cancel your subscription at any time" or maybe "after X years of use or non-use" ?

Some related discussion on a submission from a customer a few weeks ago:

VPNSecure deactivated all lifetime subscribers

https://news.ycombinator.com/item?id=43865593

The company must remain profitable, otherwise it will bankrupt, right. I wonder what a better path forward was. Perhaps their T&C allow to lower through put of the LT-subscriptions and offer an upgrade to breakeven on LT-subs.

Or you know, honor the contracts that were already in place, and any new contracts get a temporal subscription instead of a lifelong one... Otherwise they shouldn't have bought the assets.

> Otherwise they shouldn't have bought the assets.

They probably wouldn't if they had known, so I guess the seller may left some information out.

(psst: they knew.)

Whether or not the company will go bankrupt is immaterial to their contractual obligations.

Otherwise, no one would ever declare bankruptcy. They'd just say, "If I pay I'll go bankrupt, so I won't pay."

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