Netflix, Inc. (NASDAQ:NFLX) could get in trouble, as on Monday it was sued by a French consumer advocacy group in a Paris court. The group has accused the leading video streaming service of violating subscriber agreements.
Accusations from CLCV
In a statement released on Monday, the Confederation for Consumption, Housing, Living and Environment (CLCV) said the video streaming company’s subscriber agreement included “malicious and illegal clauses.” Netflix retains the right to change the terms of its agreement without informing its customers, however, the group says under French law, companies are required to notify customers of changes, along with giving them an option to withdraw without a penalty.
The other complaint from CLCV is that Netflix does not guarantee the quality of its video streams, and therefore, in case a subscriber is not satisfied with the services offered, he or she cannot get a refund or negotiate compensation for it. Lastly, usage of the English language for some links of pre-contractual information and conditions is also an issue. CLCV claimed that the company’s subscriber agreement in France includes several references only in English, and “rather unusual legal explanation” in French.
No comment has been provided by Netflix on the specific points of the lawsuit, but a spokesperson did say they are looking into the charges put by the consumer group.
“We strive to offer the best possible service to our customers, including streaming quality and the ability to cancel any time,” a company representative said in a statement.
CLCV also supports Netflix
Despite the accusations, CLCV finds Netflix’s entry into France entirely positive for consumers. With the entry of Netflix, CCLV expects competition to rise in the business of pay TV, which will help in lowering the prices of services.
“Pay TV is still governed by a small number of players with high subscription costs,” the group said.
Netflix is expanding its foothold in Europe, and on Sept. 15, it launched in France, along with five other European countries, including Germany, Luxembourg, Belgium, Austria and Switzerland. The company took just two weeks to sign up more than 100,000 subscriptions in France.
On Monday, Netflix shares fell 1.06% to $356.47, and year to date, shares are down by over 3%.