Consumer Protection Agency Blasts Streaming Service Abuses

Eleven popular Chinese video and audio streaming platforms were asked by consumer protection authorities in eastern China’s Zhejiang Province to correct practices on automatic renewal and misleading advertising.

Platforms summoned Wednesday by the Consumer Rights Protection Commission of Zhejiang Province were iQiyi, the Tencent Holdings video and sports platforms, Youku, Sohu TV, Mango TV, PPTV, Le.com, Bilibili, Ximalaya FM and Qingting FM.

The regulator for the wealthy province of 57.4 million people cited problems with auto-renewal, privacy protection and pricing by the platforms and ordered them to submit rectification plans and timetables by April 17.

Many of the platforms set auto-renewal of subscriptions as the default and make it difficult for users to cancel services. The regulator asked them not to default to auto-renewal or direct consumers to choose the option recommended by the platform. All options should be displayed on single web gage, and consumers should be provided with a one-click option to cancel subscriptions, the commission said. Platforms must also notify subscribers three days before subscriptions expire and charge new subscription fees only after obtaining user consent.

Apple Inc. takes a 30% cut on all sales made through its app store, including video and audio streaming subscriptions. Some platforms pass that cost to subscribers by charging iOS users a higher price, so consumers using Android and Apple devices find they pay different prices for the same content.

The regulator found that this practice is price discrimination and required platforms to guarantee that all users pay the same price for the same service.

It’s a common practice by many platforms to place full-screen ads on the opening page. The commission ordered them to provide a one-click option in a prominent position to close the ad page.

Representatives from Ximalaya, Tencent Video and Mango TV said they have started to correct these problems. Android users now can directly cancel auto-renewal, while iOS users can cancel by clicking a link, Ximalaya said.

Tencent Video said it will further protect consumers’ privacy rights, for example by changing their settings and not sharing their contact lists. Mango TV said it will explicitly inform its subscribers of their ad rights, including an option to close and skip ads with one click.

Youku and iQiyi told Caixin Thursday that they are taking actions to rectify problems brought up by the regulator.

Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com)