The Fair Trade Commission (FTC) said Wednesday that it had ordered Netflix to amend the video streaming platform’s unfair terms and conditions in the company’s subscription contracts.
South Korea’s antitrust regulator deemed Netflix’s changing of subscription plans and prices without consent as “unfair” to its subscribers and ordered the streaming platform to revise its terms.
The FTC required Netflix to notify customers of its plan to change fees or subscription plans and must obtain consent from users.
Netflix, however, has been alerting subscribers of fee changes but, at times, does not secure a subscriber agreement, according to the FTC.
The streaming service will apply the revisions starting on January 20. This is the first time a government entity ordered such revisions to be administered by an over-the-top international streaming service.
The Fair Trade Commission said that the order signals strengthened reviews on other global video streaming platforms that could enter the Korean market. The watchdog also stated that it would continue reviewing the terms and conditions of both local and foreign companies.
The FTC previously identified a total of six clauses that it deemed to violate users’ rights. Netflix then proposed amendments to the said clauses and would further review its terms and conditions.
Starting January 20, Netflix must have to ask permission from subscribers when they make changes in the subscription plans and fees. Before, Netflix could modify the prices as they wish and apply the alterations to succeeding billing without prior user approval.
According to FTC, Netflix must also immediately terminate subscriptions when accounts are related to any illegal activity such as copyright violations or misuse of credit cards.
After the implementation of the new revisions, users will also be responsible for activities while their account is in use.
The video platform’s new terms are more specific on the conditions for terminating subscriptions.
Since the start of its service in 2016 in South Korea, Netflix has partnered with local media networks and production companies to create stories designed to entice audiences in Asia and across the globe.
