Fairfield woman sues Amazon over video purchases
The lawsuit claims Amazon leases digital videos to customers under the guise of an outright sale.
(Amazon gift cards are pictured in an undated photograph. Image via Michael Mozart/Flickr Creative Commons)
A Fairfield woman has filed a federal lawsuit accusing Amazon of a bait-and-switch tactic when it comes to the technology and retail giant’s digital video sales.
The lawsuit filed by Amanda Caudel earlier this year is seeking class-action status over Amazon’s marketing and sales tactics for its Amazon Prime Video service.
Caudel alleges Amazon is engaged in unfair competition and false advertising over how it sells copies of movies and TV shows through Prime Video. New movie releases cost an average of $15 while episodes of television shows start around $3. Caudel says customers who purchase TV shows and movies believe they’re getting a permanent copy, but Amazon is actually selling them a perpetual license that can be terminated at any time.
Caudel says this is unfair because Amazon’s one-time fee is significantly higher than the cost of renting the same movies and TV shows through the service. Movie rentals start at around $6, and customers must watch the film within a certain amount of time.
Amazon says the practice is industry-standard — competitors Apple, Google, Microsoft, Comcast and others do the same with their digital media sales — and is clearly spelled out in the terms of its service, which customers must agree to before using Prime Video.
Customers who opt to pay the one-time fee are given a perpetual license to watch a movie or TV show as long as Amazon has the rights to distribtue it in their store, the company says.
Amazon’s licensing deals were first put into the spotlight after it removed some Disney films in late 2013. Customers who paid a one-time fee for the film were told they could no longer watch the movie through Amazon’s Prime Video service because the retailer no longer had the rights to distribute it.
Customers were told to download a file of the films in question before the license lapsed so they could continue watching their purchased movies in other ways. Some customers were offered Amazon store credit as a goodwill gesture.
Amazon’s terms of service say it is not liable for films and TV shows that are rendered unavailable to customers if their licensing terms expire.
The practice is similar to how computer software is sold: Customers who purchase software, like Microsoft Office, are able to download it for free via Microsoft’s website but must pay for a license to actually use the software. The license is often distributed to paying customers in the form of a registration key.
The same principle applied decades ago when software was distributed on floppy disc and CD-ROM: Customers paid for the license to use the software. The disc merely served as a way for customers to get access to the software they licensed.
Movies and TV shows have traditionally been sold the same way: Customers purchased a license to watch films in the privacy of their own home. Tapes and DVDs were the mechanism for those customers getting access to motion pictures.
But physically having a tape, DVD or CD-ROM led many people to believe they were outright purchasing a copy of a film, especially since movies didn’t require using a registration key before viewing. That line of thinking has transitioned into the 21st Century with streaming media being offered to customers under the same retail sales principles as licensed software — and it leads to confusion when consumers aren’t able to play back media that they thought they purchased outright.
“While it is true that buyers can download copies and this only impacted the streaming versions, it still seems rather troubling that people who thought they were buying something found out that they weren't,” Michael Masnick, a columnist with the technology website TechDirt, wrote in 2013. “This is one of the many reasons why people are so concerned about these kinds of offerings. They know that you're no longer really buying anything, but getting a very limited license.”
Still, a lawsuit like Caudel’s could drastically change the streaming video landscape when it comes to one-time licensing fees for movies and TV shows distributed by Amazon and others, particularly if she prevails in achieving class action status.
An attorney representing the Solano County woman told the FOX Business Network that they “look forward to representing consumers and vindicating their rights against Amazon for its deception.”
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