Silence is consent: Opting out of the Digital Age

Author

Josiane Fréchette,

Organization

Option consommateurs

Published

2018

Summary

Online subscription services such as Netflix, Spotify, Good Food, and FabFitFun are increasingly changing the business model for internet companies. Rather than selling products directly to consumers, these companies instead sell subscriptions that allow subscribers to access a virtual library. To attract customers to these subscription services, companies will often offer people a free trial or a discount, after which customers are automatically subscribed to their services. These types of contract have come under scrutiny from critics, who fear that they carry with them problematic consequences for consumers. To study this issue, Option consommateurs (OC) consulted fifty Canadian consumers from Québec, Ontario, and British Columbia. OC also studied the relevant legislation, both in Canada and abroad, and reviewed the terms and conditions of some of the contracts.

OC found that automatic subscriptions can cost consumers over $100 per year. Although, they found that a majority of consumers were aware that their trial period was temporary and would be followed by an automatic subscription, they also expressed discomfort with providing payment information prior to the free trial, and would have preferred to give it prior subscribing. It was also found that the contracts examined were greatly lacking in uniformity. All contracts contained several clauses, and the cancellation clause was incomplete, making it more difficult for consumers to understand their options. OC has identified several recommendations that are worth exploring . For instance, Québec and Manitoba are the only two provinces who have entirely banned the practice of automatic subscriptions. In all other provinces, automatic subscriptions are not regulated. Instead of banning automatic subscriptions, other jurisdictions, including the United States and the European Union, have explored alternative policies that impose precise disclosure requirements on online merchants, such as sending notifications to consumers at the end of a trial period, providing consumers with clear instructions on how to cancel, or “opt out,” of automatic subscriptions, and ensuring that consumers have accurate information about the content of the trial period.

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OCA Funded Research
This research received funding support through the Office of Consumer Affairs' Contributions Program.


Contact information

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Source: Consumer Policy Research Database

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