‘Freedom to cancel is not consent’: Italian Netflix ruling raises questions on subscription services

A recent court ruling against Netflix in Italy is prompting renewed scrutiny of how subscription-based businesses implement price increases, with potential implications for operators in Malta.

In a judgment delivered on 1st April 2026, the Court of Rome found that Netflix’s repeated price hikes between 2017 and 2024 breached consumer protection rules, including Directive 93/13/EEC. The court ruled that the platform’s contract terms allowed for unilateral price increases without sufficiently justified reasons, rendering those clauses unfair and unenforceable.

As a result, Netflix has been ordered to roll back subscription prices to earlier levels and notify millions of current and former subscribers of their right to claim refunds, which could reach up to €500 depending on the plan and duration of subscription. The company has said it will appeal the decision.

Not just an Italian issue?

While the ruling is rooted in Italy’s Consumer Code, which transposes EU law into national legislation, questions have emerged as to whether the same legal reasoning could apply across other EU Member States.

Speaking to BusinessNow.mt, David Thake argues that the principle underpinning the ruling is not unique to Italy.

“The principle that cancellation rights don’t substitute for consent is squarely grounded in EU law, not an Italian peculiarity,” he said, pointing to Directive 93/13/EEC as the foundation of consumer contract protections across the bloc.

He added that the directive explicitly flags as potentially unfair any terms that allow a business to alter a contract unilaterally without specifying a valid reason, or to increase prices without ensuring genuine consumer agreement.

‘Transparency’ at the core

According to Mr Thake, the legal test has already been shaped at EU level, referencing case law from the Court of Justice of the European Union which requires that consumers must be able to foresee, at the point of signing, how and why prices may change.

“A price-change clause is only transparent and enforceable if the consumer can foresee, at the moment of signing, the circumstances and the method by which their price may change,” he explained.

He noted that courts in Berlin and Cologne have already reached similar conclusions in cases involving Netflix, while parallel legal challenges are ongoing in other jurisdictions.

Implications for Malta

For Malta, the issue is particularly relevant given the widespread use of subscription-based models across telecoms, streaming, and digital services.

Mr Thake pointed out that while telecom operators already comply with notice requirements under EU-derived rules, this may not be sufficient if the underlying contract terms are flawed.

“A notice saying ‘we are raising your price, you can cancel within thirty days’ is not a get-out-of-jail card if the contract the customer signed never specified, in plain language, the objective trigger and method by which that price could move,” he said.

He suggested that many contracts currently in use may contain generic price-change clauses that could be open to challenge if tested under the same legal framework.

Similar cases are being pursued in Germany and Spain, all grounded in the same EU directive on unfair contract terms.

If upheld on appeal or replicated in other jurisdictions, the decision could force a rethink of how companies structure their terms and conditions.

However, Mr Thake stressed that the ruling does not prevent businesses from increasing prices altogether.

“Businesses absolutely can raise prices – the law has never said otherwise. They just have to do it the right way,” he said.

This, he explained, requires contracts to include clear, objective and verifiable triggers for price changes, such as inflation indices or specific cost drivers, rather than broad discretionary clauses.

“The clauses that fall foul of the Directive are the ones that effectively reserve open-ended discretion to the trader and ask the customer to trust them,” he added.

With Netflix appealing the ruling and similar cases progressing in other EU countries, the legal landscape around subscription pricing remains in flux.