China's Netflix video streaming service rival iQiyi has just lost a lawsuit over its implementation of an additional fees for the advanced airing of certain content. A court in Beijing ruled against the company, forcing it to pay a small compensation to settle the complaint against it.
The case was filed against the Baidu-controlled company over its charging of additional fees to a subscriber who watched advanced episode releases of a popular Chinese television drama series. The Beijing Internet Court asked the company to pay the lawsuit's plaintiff, Wu Shengwei, a total of 1,500 yuan or roughly $210 as compensation to cover notary fees. The suit was filed in Beijing in December last year.
While the penalty may be minuscule, there is actually a much larger implication that comes with the loss. The negative press the company has received following the suit has somewhat set back its efforts to generate more revenues by selling additional premium content on top of its subscription fees.
The suit against the company is a culmination of dozens of complaints against the company's implementation of added fees to certain features and content on its platform. In Wu's case, the plaintiff, who was already a Golden VIP member with access to ad-free content and advanced episodes, was charged by iQiyi with an extra 3 yuan for every advanced episode he watched. Wu already complained that the episode of the series Joy of Life was also playing ads while he was watching.
According to the court ruling, the unilateral addition of fees for advanced episodes was damaging to the interests of subscribers. The entire hearing for the case was streamed live online, with hundreds of people waiting to hear the court's findings. The court clarified that iQiyi's business of charging people for advanced airing was not illegal. However, the company should have made sure that its implementation of new rules does not impair its existing contracts and promotions.
iQiyi stated in a post on Weibo after the ruling on Tuesday that it may appeal to the court's decision on the matter. The court's ruling will likely result in additional complaints from other subscribers, which have been protesting the company's "pay for advanced airing" business model.
Apart from iQiyi, other Chinese video streaming services such as Tencent Video also charge users who want to view advanced airing of certain television series and movies. Tencent is also currently facing a similar lawsuit from one of its subscribers, who filed a case in Beijing.
