Netflix Faces Wider Fallout After Italy Court Orders Refunds, Price Cuts

This article first appeared on GuruFocus.

After a Rome court ruled that Netflix (NFLX, Financials) raised subscription prices from 2017 to 2024 in violation of consumer protection laws, the company is at greater legal risk in Italy.

The court said that Netflix's contract terms didn't clearly explain why those prices went up. The decision could mean that millions of current and former users get their money back.

The court also told Netflix to lower prices for users who were affected. The price of a premium plan could go down from 19.99 to 11.99, and the price of a standard plan could go down from 13.99 to 9.99.

Lawyers for the consumer group said premium users who had been paying since 2017 could get back up to 500. Users of the standard plan could get about 250.

The court also told Netflix to tell affected users, including former subscribers, and to post the decision on its website and in the national press.

Netflix has said that it thinks its terms were in line with Italian law and plans to appeal. The company hasn't responded to the latest order to lower prices.