Netflix receives R$11 million fine from Procon; find out why

Procon of Minas Gerais applied a fine of R$ 11 million to Netflix. The agency classified some clauses in the streaming platform’s service provision contract as abusive. Misleading advertising, lack of adequate information and demand for excessive benefits were mentioned as the reasons that led to this decision.

Violation of the Consumer Protection Code

According to Procon-MG, Netflix violated the consumer protection code, since, in its service provision contract, it is mentioned that the platform is exempt from liability in the duty of repair of suppliers and service providers in cases of consumer infractions”.

Another clause in the contract considered illegal provided for the unlimited disclosure of consumer data without their consent. “By doing so, the supplier commits an infraction, as it conditions the contracting of the service on the transfer of the right to use data”, stated, in the decision, the Public Prosecutor Fernando Abreu.

Account sharing charges are also in question

The fact that Netflix also establishes a fee for those who share their password with people in places that the platform classifies as “outside the home” was also mentioned by Procon. “Illegally, the provider appropriates the term home and promotes a redefinition of its content, not only deviating from the legal concept, but also from that conceived by any consumer”, says the prosecutor.

The prosecutor makes a comparison with music streaming services. “If a music streaming service, for example, used the same model adopted by Netflix, you wouldn’t even be able to listen to music while driving. Therefore, the new billing system used contradicts its own advertising, which advocates: ‘Watch wherever you want’.

“It is perfectly possible to prohibit, by contract, the sharing of passwords and simultaneous access. What is unreasonable, as it violates the law, is the use of the term “residence” to restrict access to the platform, harming the exercise of consumer rights,” adds Fernando Abreu.

The decision mentions that the platform even established its own term for this: “Netflix Residency”.

“The definition is inappropriate, first, because it requires people to live in the same residence, moving away from modern understandings of family, which do not require cohabitation. Second, because it promotes the redefinition of residence to include a ‘collection of devices’, to the detriment of the consumer. Third, because it requires devices to be connected to the same internet connection, ignoring the advertising itself (Watch wherever you want) and that consumers have the right, even when in the same place, to use different internet networks, such as those on cell phones.”adds Abreu.

According to an investigation by the website F5, since Netflix established a fee for password sharing, almost a thousand users in Brazil have already filed a lawsuit against the platform.

Netflix has not yet officially commented on Procon-MG’s decision.