Amazon may have to compensate German customers for the higher Prime subscription fees it unilaterally introduced three years ago. A regional consumer protection authority, which filed the lawsuit, wants Amazon to reverse the price increase and refund the difference to its customers.
Amazon has long been the dominant player in German ecommerce. Last year, its revenue grew by 8.7 percent, reaching 39.6 billion euros, of which more than 3.6 billion euros came from advertising. Third-party sellers are competing fiercely to rise to the top on the platform, which generated a total trade volume of more than 52 billion euros last year, according to retail institute EHI.
Amazon Prime in Germany
A major part of Amazon’s success lies in its Prime subscription model, which offers shoppers various delivery benefits and access to digital content. An estimated fifteen million German consumers are members of the program. Until September 2022, the subscription cost 69 euros per year or 7.99 euros per month. Amazon then raised the price to 89.50 euros per year or 8.99 euros per month, citing rising costs as the reason.
Price adjustment clause declared unlawful
Amazon referred to a price adjustment clause added to its terms and conditions that same year. The clause allowed the company to raise Prime prices at its own discretion – which it subsequently did. However, the consumer protection authority of North Rhine-Westphalia filed a lawsuit against Amazon. The Düsseldorf court declared the price adjustment clause unlawful earlier this year, after which Amazon appealed.
Amazon may appeal again
A higher court reached the same conclusion at the end of October. Amazon said it will review the ruling and “take further legal steps if necessary”. Companies are not allowed to change prices for existing contracts at will, the court ruled. Explicit customer consent was required for the price increase.
Refunds
German customers may demand that Amazon reimburse overpaid amounts, according to the consumer protection authority. The organization plans to file a class action lawsuit, which could lead to claims totaling hundreds of millions of euros.
