A subscription is a recurring payment model where customers pay regularly (e.g., monthly, annually) for continuous access to a product, service, or content. This model also allows for automatic renewals, ensuring uninterrupted usage until the subscriber cancels. It’s popular for services like streaming, magazines, and software. Subscriptions provide convenience for users and stable revenue for providers.
To add these clauses:
Navigate to Business model > Payments and user rights > Subscriptions > Add subscription-related clauses.
Suppliers should inform about renewals 30 days in advance.
Users must be sufficiently informed in advance about automatic renewals/automatic subscription extension. Notifications should be sent via email or preferred communication methods. Fixed-term subscriptions with no automatic renewal/automatic subscription extension are acceptable, while those with automatic renewal require prior user notification. If not agreed otherwise, open-ended subscriptions may be terminated at the end of a calendar quarter with three months’ notice.
For B2C:
This general rule does not apply for fixed-term subscriptions with no automatic renewal if (1) delivery of the goods or services must take place within a year from entering the agreement, (2) the total value of the services or goods delivered under the agreement is less than DKK 2,000, and (3) payment in full is made no longer than 14 days after entering the agreement. Practical examples are annual passes to e.g. the Zoo, a museum etc. Instead, this will be defined as a consumer purchase subject to a 14-day right of withdrawal.
For B2B:
Subscriptions to consumers cannot exceed an initial term of two years. This is based on the German “Gesetz für faire Verbraucherverträge” and is mandatory when targeting Consumers in Germany.
On March 1st, 2022, Germany’s new act for fair consumer contracts came into effect. The most relevant provisions regard the termination of subscription contracts for the provision of goods or services over time.
All subscription plans are affected by the new criteria. Contracts and terms and conditions must be updated accordingly:
Please note: This applies to any consumer subscription contract.
From now on:
This provision applies to subscription contracts closed starting from March 1st, 2022. Therefore, contracts already in place before this date are not subject to the new rules.
Please note: This only applies to consumer contracts closed online.
Online traders targeting consumers based in Germany must now make the following available to their users on or via their website/app:
This provision applies to all subscription contracts starting from July 1st, 2022, regardless of when they have been concluded.
Termination must occur within a “reasonable time,” which can be specified in the T&C.
“Reasonable time” is not determined by the applicable legal framework but is interpreted ad hoc.
The supplier must send the consumer a notice in writing, via SMS, or through another electronic means indicated by the consumer, at least 30 days before the automatic renewals/automatic subscription extension.
Auto-renewal is permitted if:
a) Conditions for auto-renewal are clear.
b) The deadline set for the consumer to terminate the contract and avoid auto-renewal is not unreasonably early (no more than 30 days prior to the end of an ongoing term is advisable for agreements that run for a year at a time).
c) Reminders are sent in writing, at least a month before the deadline.
The requirement to remind the subscriber in due time before auto-renewal does not apply if the agreement can be canceled with three months’ notice (or less) after renewal. Agreements that are renewed one month at a time (e.g., digital content subscriptions) therefore do not call for reminders to be sent in accordance with (c) above.
If the supplier fails to send a written reminder in accordance with (c) above, the user will be entitled to terminate the agreement immediately at any time during the new subscription period.
The rule described stems from specific legislation and court practices that target fixed-term subscriptions that are auto-renewed. As regards trial periods, in principle, free trial periods that are converted into paid subscriptions should also be treated as fixed-term subscriptions in accordance with the principles below:
The following minimal criteria are required for automatic renewal to potentially hold up on a case-by-case basis:
For fixed-term subscriptions with automatic renewal, upon renewal, according to case law, a right of termination at any time with a maximum notice period of two months is established.
Subscription models offer significant benefits but require careful consideration of country-specific regulations. By using iubenda’s clauses and understanding the rules in different countries, businesses can ensure compliance and maintain transparent relationships with their customers.