We’ll take a closer look at this case below and explore what subscription companies can learn from it.
Why was the New York Times sued for its auto-renewal policy?
Perkins decided to sue because of the New York Times’ automatic renewals. She claimed that the company renewed her subscription automatically 23 times without her “knowledge and consent”. That led to unauthorised charges of $136 (£105.79 at the time of writing).
She signed up for a monthly digital subscription in February 2020, using the New York Times’ website. However, she alleges that the company did not state “clearly and conspicuously” that the subscription would renew each month automatically until she cancelled.
Perkins also claimed that the New York Times didn’t fully describe the cancellation policy relevant to her subscription. She also alleged that the New York Times failed to inform her in good time that the subscription cost would rise from $4 to $8 in February 2021.
She was able to file this suit against the New York Times because she was living in North Carolina when she initially bought the subscription. What does that mean? It all comes down to North Carolina’s Automatic Renewal Statute (ARS) law.
What is the Automatic Renewal Statute?
- Disclose any automatic renewal clauses “clearly and conspicuously in the contract or contract offer” when subscribers first sign up.
- Disclose “clearly and conspicuously” how subscribers can cancel their subscription when they sign up.
- For any automatic renewal “exceeding 60 days”, the seller must provide subscribers with written notice informing them of two things. First, on which date the subscription will renew, and second, their contract will renew on that date unless the subscriber cancels before that time.
- Disclose any changes to their subscription contract “clearly and conspicuously” in auto-renewal notifications. This must be done in a bold, 12-point type (minimum).
What was the outcome of the case?
Judge Kevin Castel allowed the suit to go ahead on several Perkins’ claims. Specifically, her allegation that the New York Times failed to clearly and conspicuously disclose how to cancel the subscription and that the checkout page didn’t accurately present cancellation details (i.e. no 12-point bold font).
The court refuted the New York Times’ insistence that a blue link to their Cancellation and Refund Policy was a clear and conspicuous disclosure. It stated that the cancellation methods the page linked to didn’t stand out from the rest of the text.
However, the judge found that the New York Times presented a few paragraphs of text advising users that subscriptions would automatically renew until cancelled, with one next to the checkout button.
The suit alleged that the New York Times automatically renewed subscriptions (across print, digital, and standalone offerings) and charged subscribers without meeting the requirements of California law. While the news company denied the claims, both parties agreed to a settlement to avoid the cost and potential risk of proceeding with the suit.
What can subscription companies take away from this case?
The 2022 lawsuit against the New York Times shows how important it is for subscription companies to make it clear and easy for subscribers to cancel. It’s not just good business — it’s often the law.
And companies are better off being on the right side of subscription legislation to avoid potential issues in the future. That can be tricky because this area is constantly changing, but subscription companies need to help subscribers cancel in a simple way.
So, how do you do that? The best way is to set up a subscription cancellation process that’s modular and flexible. That can help you comply with subscription and cancellation legislation all over the world.
For example, the UK Government proposed the Digital Markets, Competition and Consumers (DMCC) Bill draft in April 2023. The bill is designed to protect consumers from unfair business practices and encourage growth in the UK economy.
We get it — the prospect of losing subscribers isn’t easy to stomach for any subscription company. But making it harder to cancel than it should be can leave a bad taste in a subscriber’s mouth, and they’ll be less likely to sign up with you again months or years later.
Any subscriber, of any age, on any device should be able to navigate your online cancellation process. You should also let them tell you why they’re cancelling in the first place. Why? Constructive feedback can help you identify issues and provide subscribers a better experience.
Put yourself in your subscribers’ shoes. Chances are, you subscribe to one or two services yourself. What would you expect when you decide to cancel? What would be the quickest, easiest, most convenient method you’d like to see? Keep your answers in mind when putting your own cancellation process together.
Build your subscription cancellation flows with Limio
Perkins v The New York Times Company highlights the possible issues that subscription companies face when they fail to provide subscribers with clear, simple information on their services. Every subscription business must be transparent about subscriptions and empower subscribers with a user-friendly online cancellation process.
At Limio, a startup in London, we make things simple. We can help subscription companies create flexible, modular checkout and cancellation experiences that comply with subscription regulations. You can experiment with different configurations to find the ideal checkout experiences for your subscribers and ensure that cancellations are always easy.