Recently, Amazon Prime Video has informed its subscribers that, to avoid the insertion of advertising in their accounts, they must pay an additional charge of 50 pesos per month. Similarly, Netflix has implemented additional charges for sharing subscriptions with friends or family.
But this new strategy of entertainment companies contradicts one of the main advantages they offered: the absence of commercials while playing users' favorite content. This change has not been well received by audiences, and could generate a crisis in the industry, with possible Subscription cancellations and class action legal actions for breach of the service provision agreement.
A source specialized in economic competition who asked not to be cited, assured Expansión that Subscribers can file a class action lawsuit before Profeco for the extra fees that streaming platforms have requested, in exchange for continuing to enjoy their content without interruptions or for sharing accounts.
“(The platforms) are changing the terms of the original agreement without user authorization,” the source said.
In the United States, a precedent has already been established in this regard. Several users have filed a collective complaint against Amazon Prime Video for misleading advertising and breach of contract due to the extra charge to avoid ads in their content, although a resolution has not yet been reached.
Radamés Camargo, an analyst at the consulting firm The Ciu, maintains that people perceive increases in subscription rates for streaming services as an “obligation” to continue enjoying a service they are already using. He added that this situation could lead to considering class actions against these companies.
“These companies, with their modifications to the business model, are unilaterally imposing increases in user payments,” he explained.
A gap in regulation
However, experts recognize that Mexico faces the challenge of regulating new digital companies, such as streaming platforms, that constantly modify their business model, resulting in price increases, mergers and repercussions for consumers. Currently, it is not clear whether the regulation of digital markets corresponds to the Federal Economic Competition Commission (Cofece) or the Federal Telecommunications Institute (IFT).
“But for now I think Profeco should analyze this issue of the platforms together with the authorities to continue strengthening the rights of consumers, since they are being required to pay an extra for the same service,” Camargo said.
Expansión requested information from Profeco about possible collective actions against streaming platforms but until the publication of this text it did not comment.
According to data from the consulting firm Statista, it is projected that this industry will generate income of 1,216 million dollars in Mexico by 2024. In addition, it is expected that by 2027, the number of subscribers will reach 74.9 million.
