Owner Yahoo settles auto-renew class action

Those Were the Days

Rivals.com: A classic internet story.

Rivals, which currently features college basketball and football recruitment news and discussion, was founded in 1998 by Jim Heckman, the son-in-law of the University of Washington's then-head football coach.

Like nearly anything founded in 1998, Rivals experienced a huge growth spurt, attempted a relatively ambitious initial public offering ($100 million) and went belly-up in 2001.

The site's operations never fully shuttered; Rivals was passed to a new owner, who sold the network to Yahoo for $60 million in 2007. Today, the company calls itself "the most respected name in team-specific college sports coverage and the country's No. 1 authority on college football and basketball recruiting."

Sacked Twice on the Same Play?

Twenty years after its birth, Rivals is getting attention for its automatic renewal and refund policies. A class action lawsuit, filed in March 2017 in California Superior Court, Santa Clara County and later moved to the state's Northern District, claimed that the network failed to clearly and conspicuously disclose its intention to automatically renew its subscription charges without first obtaining consumer consent and in violation of California's Automatic Renewal Law. The plaintiffs also alleged that Rivals failed to "clearly indicate its cancellation policy and fail[ed] to provide information regarding how to cancel a subscription."

In an amended complaint, newly added plaintiff Yuan Guo claims he paid $99.95 for a year's subscription, only to discover that the charge recurred a year later. Guo maintains that Rivals failed to disclose on either the sign-up or payment page that the automatic charge would occur, and Rivals never received his affirmative consent for the ongoing charge. Guo says that when he tried to cancel the subscription, he learned the payments were nonrefundable, a policy of which he had not been made aware.

The action sought redress under California's Unfair Competition Law – specifically, the state's Automatic Renewal Law and Liquidated Damages Law.

The Takeaway

Yahoo ultimately agreed to a preliminary settlement by July 2018, just three months after Guo filed his amended complaint. The final agreement grants $20 in cash or five free months of service to class members, along with $300,000 for attorney's fees. Guo received a $5,000 payday as an incentive award.

Yahoo is bound by the agreement to revamp the Rivals subscription page to bring the site into compliance with relevant California law. These modifications include a disclosure, which must be located immediately above where a consumer must click to submit their subscription, that sets forth the automatic renewal provision.

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