As readers of this blog know, state legislatures have been busy enacting or updating their laws governing auto-renewal statutes, which cover subscription programs of all kinds. You can read about some of those updates here and here.
Class action lawyers have been busy too, pursuing claims under their states' consumer protection statutes, alleging violations of the auto-renew laws. The claims against Apple were fairly typical: Apple allegedly failed to make the requisite disclosures to consumers about automatically renewing charges and to provide an easy method of cancellation for certain apps purchased on iPads, AppleTVs and iPhones. A year ago, a California court certified a four million member class of consumers. Now, as reported by Law360, the court has preliminarily approved a settlement of the action, in which Apple would pay over $16 million in i-Tunes credits and checks to class members.
The case, though apparently on its way to settlement, is a good reminder that subscription programs, though convenient for consumers and lucrative for sellers, must be carefully designed: upfront disclosures about the automatically renewing charges and easy methods of cancellation are the baseline requirements; more is required by many of the state laws.
The complaint alleged that Apple’s practices violated the Golden State’s Automatic Renewal Law by failing to disclose to consumers it wouldn’t refund automatic renewal subscriptions that weren’t canceled. The suit also accuses Apple of failing to provide consumers with an “easy” cancellation method for their subscriptions and of failing to inform consumers how to cancel their subscriptions.