Consumer's Single Right to Cancel a Free-to-Paid Subscription
A consumer generally possesses a single right of withdrawal for a subscription taken out at a distance. This applies even if the subscription is initially free and subsequently renews automatically.
The Sofatutor Case: A Background
The situation changes significantly if the consumer was not adequately informed about the total cost of the subscription. For example, the company Sofatutor operates internet learning platforms designed for students. When customers subscribe for the first time, they can test the service free of charge for 30 days.
During this initial 30-day period, the subscription can be cancelled without notice at any time. The subscription only becomes chargeable after these 30 days have elapsed. If the paid subscription period expires without cancellation, the subscription automatically renews for a specified duration.
The Legal Question: Multiple Rights of Withdrawal?
In cases of distance contract conclusion, Sofatutor informs consumers about their right of withdrawal (right of revocation). However, the Association for Consumer Information (VKI) holds a different view.
The VKI argues that consumers should be entitled to a right of withdrawal not only for the 30-day free trial subscription, but also for its conversion into a paid subscription and subsequent extensions. The Supreme Court of Austria, which is handling the case, referred the matter to the Court of Justice for an interpretation of the Consumer Rights Directive.
ECJ Ruling: Single Right of Withdrawal as a Principle
The Court of Justice responded that, as a general rule, a consumer has the right to withdraw from a distance contract only once. This principle applies to subscription contracts that initially offer a free period and then automatically renew if not terminated.
Exception: Inadequate Information Leads to New Right of Withdrawal
Nonetheless, there is a crucial exception. If the consumer was not clearly, understandably, and explicitly informed at the time of subscription that the service would become chargeable after the free initial period, they must then be granted a new right of withdrawal.
Conclusion
This ruling from the European Court of Justice clarifies the conditions under which consumers can exercise their right of withdrawal for online subscriptions. It emphasizes the importance of transparent information for service providers. Companies must ensure that consumers are fully aware of all costs and terms associated with free trial periods.