While the social network isn’t doing away with its direct-sale initiative, it is focusing its attention on ads that drive consumers to retailers’ sites.
The online media company has set up a $2 million compensation fund.
Software and games retailer RealNetworks Inc. says it has agreed to settle a dispute with the Washington State attorney general’s office, which claimed the retailer engaged in unfair and deceptive practices that violated the state’s Consumer Protection Act.
The attorney general’s office says it received more than 500 complaints over the last seven years that claimed the retailer violated the act by pre-checking boxes to obtain consent from consumers to purchase products or services; failing to clearly disclose the terms of its free trial offers; and making it difficult for consumers to cancel their subscriptions.
“Deceptive pre-checked boxes and fine print obligated consumers to not-so-free trials for subscription services they didn’t want in the first place,” says Attorney General Rob McKenna. “People were charged for months — sometimes years — paying hundreds of dollars for subscriptions they knew nothing about.”
To settle the dispute, RealNetworks agreed to set up a $2 million fund that it will use to refund subscribers. It will also pay $400,000 to cover the attorney general’s legal costs.
"While we disagree with the complaint filed by the Washington Attorney General, we acknowledge that some aspects of RealNetworks' e-commerce practices were not what our customers expected of us,” RealNetworks’ CEO Thomas Nielsen says. “More importantly, those practices were not up to the high standards we expect of ourselves.”
RealNetworks says it discontinued the practices “years ago.”
The settlement relates to subscriptions between Jan. 1, 2007 and Dec. 31, 2009.