Automatic renewal of online subscription to 30 times price invalid

“Subscription traps” are out there all the time. But some seem particularly outlandish. A provider of such a service has now failed to make the alleged claims.

On October 24, 2019, the Munich Local Court dismissed the lawsuit filed by a Berlin-based stock letter company against the subscriber from Munich for payment of annual subscription costs in the amount of 1,298 euros.

At the beginning of 2019, the plaintiff advertised on its website a stock market letter that it publishes weekly for stock market trading in commodities. It offered a three-month trial subscription at a price of 9.99 euros instead of the regular 699.00 euros to get to know the company. This limited offer for new readers ends today at 11.59 pm.
The offer was based on the terms and conditions used by the plaintiff, which were available on the order page.

The defendant accepted the plaintiff’s offer on Jan. 16, 2019, and ordered a trial subscription to its stock letter. The plaintiff confirmed the conclusion of the test subscription and its start on 16.01.2019 to the defendant by e-mail of the same day. At the same time, the plaintiff claimed the subscription costs for the trial subscription in the amount of EUR 9.99, which the defendant paid.

The plaintiff’s terms and conditions contain, among other things, the following clauses: All subscriptions are extended by one year if they are not terminated in due time before the end of the respective subscription period. The cancellation period for the quarterly subscription is six weeks. The annual subscription price is 1,298.00 euros.

On March 12, 2019, the plaintiff invoiced the defendant for subscription costs for the stock exchange letter in the amount of 1,298.00 euros for the subscription period from April 17, 2019 – April 17, 2020. The defendant revoked the conclusion of the contract by email of the same day, signed on 02.04.2019. The plaintiff accepted this only as a termination effective 04/17/2020.

The defendant submits that he ordered at that time around midnight and, contrary to the information provided by the plaintiff, did not subsequently receive a stock exchange letter, and therefore did not observe the notice period. He is of the opinion that the renewal clause of the plaintiff’s General Terms and Conditions is invalid because it is surprising. Furthermore, the revocation instruction used by the plaintiff was incorrect, so that the defendant’s signed revocation of April 2, 2019 was made in due time.
The competent judge at the Munich District Court considered the asserted claim for payment to be unfounded:

“The (renewal) provision (…) of the General Terms and Conditions in connection with the accompanying price increase (…) is surprising in the sense of § 305 c para. 1 BGB and thus did not become part of the contract. As a result, the original contract for the test subscription was not extended, so that no further payment other than the payment already made in the amount of EUR 9.99 for the test subscription is owed.

It is true that a clause according to which the term is extended by one year unless it is terminated in due time is not surprising in itself. Here, however, the extension means that the contract is renewed for four times the time for thirty times the price. The contractual partner must not expect this, so that the clause is invalid.

In view of the presentation of the plaintiffs’ website, the impression is rather created that the aim is precisely to put customers under time pressure and to bait them with the test subscription offered only for a very short period of time in order to then be able to assert exorbitant price increases in the event of failure to revoke.

(…) However, there is no indication that the price for the test subscription will no longer apply, but that an annual subscription will follow with a price of 1,298.00 euros.

Assuming a quarterly price of 9.99 euros, this means an annual price of 1,298.00 euros, a price increase of more than 30 times for the same quarterly period, i.e., the price increases by more than 120 times for an extension of four times this period. The contractual partner need not expect such a clause in general terms and conditions. This is thus surprising (…).

Whether the plaintiff’s revocation instruction was effective or the defendant’s revocation was within the time limit can thus remain undecided.”

Author: Marian Härtel

Marian Härtel ist Rechtsanwalt und Fachanwalt für IT-Recht mit einer über 25-jährigen Erfahrung als Unternehmer und Berater in den Bereichen Games, E-Sport, Blockchain, SaaS und Künstliche Intelligenz. Seine Beratungsschwerpunkte umfassen neben dem IT-Recht insbesondere das Urheberrecht, Medienrecht sowie Wettbewerbsrecht. Er betreut schwerpunktmäßig Start-ups, Agenturen und Influencer, die er in strategischen Fragen, komplexen Vertragsangelegenheiten sowie bei Investitionsprojekten begleitet. Dabei zeichnet sich seine Beratung durch einen interdisziplinären Ansatz aus, der juristische Expertise und langjährige unternehmerische Erfahrung miteinander verbindet. Ziel seiner Tätigkeit ist stets, Mandanten praxisorientierte Lösungen anzubieten und rechtlich fundierte Unterstützung bei der Umsetzung innovativer Geschäftsmodelle zu gewährleisten.