In 2006, the publisher of the Wall Street Journal (NSDQ: NWS) spun off financial magazine Barron’s Online and required subscribers to pay more if they wanted to keep reading Barron’s. This week, angry customers who sued learned they are out of luck after a New York court rejected their breach of contract claim.
In a 15-page decision, U.S. District Judge Miriam Cedarbaum concluded that the customers’ subscriber agreement entitled the publisher, Dow Jones, to change the terms and price of the contract.
The subscriber agreement allowed readers of the Wall Street Journal to access Barron’s Online for free but, in January of 2006, Dow Jones required readers to pay an additional $20 for ongoing access to the financial publication.
The law of consumer contracts typically does not allow merchants to change prices on the fly. The judge may, however, have sided with Dow Jones because 79 percent of the WSJ’s approximately 400,000 online subscribers did not access Barron’s at all.
The judge also found that Dow Jones didn’t abuse a provision in the subscription agreement that permitted it to make changes to fees and services:
“There is no evidence that Dow Jones used the discontinuance provision to deprive plaintiffs of an unreasonably large part of WSJ Online’s content, and there is no reason to interpret this provision as permitting such extreme behavior.”
The subscribers also argued that Dow Jones failed to provide fair warning of the price change. Judge Cebarbaum, however, ruled a pop-up box on the website weeks beforehand was adequate notice.
For a broader discussion of the legal issues in the case, see this post by Venkat Balasubramani of The Technology and Marketing Law Blog which was first to report the decision.