A recent class action filed in federal court against YouTube is the latest in a growing list of class actions against companies regarding their automatic renewal practices.
The suit alleges that YouTube and its parent company Google (together, “YouTube”) failed to provide the requisite disclosures and authorizations in connection with their subscription services, including YouTube TV, YouTube Music, and YouTube Premium, as required by Oregon’s Automatic Renewal Law (“ARL”) and in violation of Oregon’s Unlawful Trade Practices Act (“UTPA”). See Walkingeagle, et al. v. Google LLC, et al., No. 3:22-cv-763 (D. Or.). According to the complaint, YouTube enjoyed rapid growth in their user-base by employing “dark patterns” in their user interfaces to “trick” users into doing things they might not otherwise do, including signing up for recurring services (and bills).
The plaintiffs claim that YouTube violated the central requirements of Oregon’s ARL—namely: (1) presenting the automatic renewal terms in “a clear and conspicuous manner” and “in visual proximity” to the request for consent to the offer before fulfilling the subscription; (2) obtaining the plaintiffs’ affirmative consent to the automatic renewal offer terms before charging them; and (3) providing an acknowledgment with the offer terms, cancellation policy, and information on how to cancel the subscription. Specifically, the plaintiffs allege that a reasonable consumer would find the automatic renewal terms on the checkout page unclear as to whether formal cancellation is required to stop the recurring payments and whether the customer is agreeing to recurring payments that will continue indefinitely. Moreover, the plaintiffs contend that the price terms appear far away from the “final checkout” button and that the checkout page lacks explanations as to how and when to cancel to avoid being automatically renewed or to receive a refund.
The plaintiffs seek to represent a class of individuals in Oregon who incurred fees in connection with YouTube’s subscription offerings within the applicable statute of limitations period, and seek compensatory, statutory, and punitive damages.
Auto-renewal law is a fast-growing practice area that has recently resulted in multimillion-dollar settlements. Similar suits are expected to follow as more states enact new auto-renewal laws or beef up old ones. Notably, new amendments to California’s ARL—which is already the most robust in the country—that impose additional renewal notice and online cancellation requirements are set to take effect starting July 1, 2022.
This issue is not limited to class action litigation. Our FTC experts, who continue to closely monitor developments in the auto-renewal area, see this as a growing area of interest for state and federal regulators as well.