Case 3:22-cv-00763-MO Document 19 Filed 09/06/22 Page 1 of 95
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`Stanton R. Gallegos, OSB #160091
`StantonGallegos@MarkowitzHerbold.com
`MARKOWITZ HERBOLD PC
`1455 SW Broadway, Suite 1900
`Portland, OR 97201
`Telephone: (503) 295-3085
`
`Neal J. Deckant *
`ndeckant@bursor.com
`Julia K. Venditti *
`jvenditti@bursor.com
`BURSOR & FISHER, P.A.
`1990 North California Boulevard, Suite 940
`Walnut Creek, CA 94596
`Telephone: (925) 300-4455
`
`
`
`Attorneys for Plaintiffs and the Putative Class
`Additional Counsel on Signature Page
`
`
`
`
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF OREGON
`
`PORTLAND DIVISION
`
`
`
`VICTOR WALKINGEAGLE; and
`NATHAN BRIGGS, on behalf of
`themselves and all others similarly situated,
`
`Plaintiffs,
`
`v.
`
`
`
`GOOGLE LLC, d/b/a YOUTUBE,a
`Delaware limited liability company; and
`YOUTUBE, LLC, a Delaware limited
`liability company,
`
`
`
`Case No. 3:22-cv-00763-MO
`
`FIRST AMENDED CLASS ACTION
`COMPLAINT FOR VIOLATION OF
`OREGON’S UNLAWFUL TRADE
`PRACTICES ACT (“UTPA”),
`ORS 646.608(1)(ttt) and ORS 646.608(1)(sss)
`
`JURY TRIAL DEMANDED
`
`
`
`
`
`
`
`
`Defendants.
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`Page 1 - FIRST AMENDED COMPLAINT
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`Plaintiffs Victor Walkingeagle and Nathan Briggs (collectively, “Plaintiffs”) bring this
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`action individually and on behalf of all others similarly situated against Defendants Google LLC,
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`d/b/a YouTube, and YouTube, LLC, (collectively, “YouTube” or “Defendants”). Plaintiffs make
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`the following allegations pursuant to the investigation of their counsel and based upon
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`information and belief, except as to allegations specifically pertaining to themselves and their
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`counsel, which are based on personal knowledge.
`
`NATURE OF THE ACTION
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`1.
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`This is a putative class action lawsuit against Defendants for engaging in an
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`illegal “automatic renewal” scheme with respect to their subscription plans for YouTube-branded
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`products and services that are available exclusively to consumers who enroll in Defendants’
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`auto-renewal membership programs (collectively, the “YT Subscriptions,” enumerated below).
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`Defendants own and operate a media-sharing platform, YouTube, which is an American online
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`video sharing and social media platform that contains, among other things, videos created by
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`individuals and entities that have registered with YouTube and uploaded their videos to a
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`“channel.” YouTube is accessible as a website at youtube.com (the “YT Website”), or as a
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`mobile application or an application on a set top streaming device (collectively, the “YT Apps”)
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`(together with the YT Website, the “YouTube Platform”). Relevant to Plaintiffs’ allegations,
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`when consumers sign up for the YT Subscriptions, Defendants actually enroll consumers in a
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`program that automatically renews the YT Subscriptions from month-to-month or year-to-year
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`and results in monthly or annual charges to the consumer’s credit card, debit card, or third-party
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`payment account (“Payment Method”). In doing so, Defendants fail to provide the requisite
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`disclosures and authorizations required to be made to Oregon consumers under Oregon’s
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`Automatic Renewal Law (“ARL”), ORS 646A.295, in direct violation of Oregon’s Unlawful
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`Trade Practices Act (“UTPA”), ORS 646.608(1)(ttt), and under Oregon’s Free Offer Law
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`(“FOL”), ORS 646.644, in violation of Oregon’s Unlawful Trade Practices Act (“UTPA”),
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`ORS 646.608(1)(sss).
`
`2.
`
`With more than 2.5 billion monthly users who collectively watch more than one
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`billion hours of videos each day, it is the second most visited website in the world.1 While the
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`basic features of the YouTube Platform are free to use, Defendants offer various products and
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`features that are only available to paid subscribers. Specifically, Defendants offer the following
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`fee-based automatic renewal membership programs: YouTube TV, YouTube Music, and
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`YouTube Premium (collectively, the “YT Subscriptions”). YouTube TV is a subscription-based
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`service that provides paying subscribers in the United States access to exclusive YouTube
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`content, premium channels, and film rentals via authorized devices. YouTube Music and
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`YouTube Premium are subscription-based services that offer, among other things, premium and
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`ad-free music streaming and ad-free access to all YouTube content, including exclusive content
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`commissioned from notable YouTube personalities. Consumers may sign up for Defendants’
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`YT Subscriptions through the YT Website and, in some cases, the YT Apps.2
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`3.
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`Through the YouTube Platform, Defendants market, advertise, and sell to
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`consumers in Oregon paid memberships to the YT Subscriptions. To sign up for Defendants’
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`YT Subscriptions through the YT Website or the YT Apps, customers provide Defendants with
`
`
`1 See Statista, Most popular social networks worldwide as of January 2022, ranked by number of monthly
`active users (July 2022), https://www.statista.com/statistics/272014/global-social-networks-ranked-by-
`number-of-users/
`
`2 Effective March 13, 2020, “YouTube TV [no longer] accept[s] new signups through in-app
`subscriptions on the iPhone and iPad[.]” https://www.macrumors.com/2020/02/13/youtube-tv-app-store-
`subscriptions-ending/ (citing Defendants’ email to all YouTube TV subscribers dated February 13, 2020).
`Thus, all subscribers who have enrolled in Defendants’ YouTube TV subscription program since then
`must have subscribed to YouTube TV via the YT Website. However, prior to that point, customers were
`able to initiate a paid YouTube TV subscription via either the YT Website or the YT Apps.
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`their billing information and Defendants then automatically charges their customers’ Payment
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`Method as payments are due, typically on a monthly or annual basis. Defendants are able to
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`unilaterally charge its customers renewal fees without their consent, as Defendants are in
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`possession of their customers’ billing information. Thus, Defendants have made the deliberate
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`decision to charge Plaintiffs and other similarly situated customers on a monthly or yearly basis,
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`absent their consent under the ARL, relying on consumer confusion and inertia to retain
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`customers, combat consumer churn, and bolster its revenues.
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`4.
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`Pursuant to the ARL, online retailers who offer automatically renewing
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`subscriptions to Oregon consumers must: (i) provide the complete automatic renewal offer terms
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`in a clear and conspicuous manner and in visual proximity to the request for consent prior to the
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`purchase, see ORS 646A.295(1)(a); see also ORS 646A.293(5)(a)-(e) (setting forth definition of
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`“offer terms” as used in ORS 646A.295); (ii) obtain consumers’ affirmative consent to the
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`purchase prior to charging their Payment Methods in connection with the subscriptions, see id.
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`§ 646A.295(1)(b); and (iii) provide an acknowledgment that includes the automatic renewal offer
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`terms and identifies a cost-effective, timely, and easy-to-use mechanism for consumers to cancel
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`their subscriptions, see id. §§ 646A.295(1)(c), 646A.295(2).
`
`5.
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`Consumers purchasing the YT Subscriptions do so either by choosing a free trial
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`that automatically renews with a paid subscription at the end of the trial period, or a paid
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`monthly or annual subscription (at either the full standard recurring rate that Defendants
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`ordinarily charge or at a promotional or discounted rate that remains static for a limited period of
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`time and then automatically renews to the full standard rate). As will be discussed below, the
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`enrollment process for a YT Subscription on the YT Website and Apps uniformly violates each
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`of the core requirements of the ARL. Defendants also make it exceedingly difficult and
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`unnecessarily confusing for consumers to cancel their YT Subscriptions.
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`6.
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`Specifically, Defendants systematically violate the ARL by: (i) failing to present
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`the automatic renewal offer terms in a clear and conspicuous manner and in visual proximity to
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`the request for consent to the offer before the subscription or purchasing agreement is fulfilled, in
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`direct violation of Section 646A.295(1)(a) of the ARL; (ii) charging consumers’ Payment
`
`Method without first obtaining their affirmative consent to the agreement containing the
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`automatic renewal offer terms, in direct violation of Section 646A.295(1)(b) of the ARL; and
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`(iii) failing to provide an acknowledgment that includes the automatic renewal offer terms and
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`information regarding how to cancel in a manner that is capable of being retained by the
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`consumer, in direct violation of Section 646A.295(1)(c) of the ARL. See ORS
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`646A.293(5)(a)-(e) (defining “offer terms” as used in ORS 646A.295). The acknowledgment
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`also fails to disclose a toll-free telephone number or describe another cost-effective, timely, and
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`easy-to-use mechanism for cancellation, and in fact Defendants make it exceedingly difficult and
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`unnecessarily confusing for consumers to cancel their YT Subscriptions, in violation of Section
`
`646A.295(2) of the ARL.
`
`7.
`
`As a result, all goods, wares, merchandise, or products sent to Plaintiffs and the
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`Class under the automatic renewal of continuous service agreements are deemed to be
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`“unconditional gifts” under the ARL. ORS 646A.295(5).
`
`8.
`
`For the foregoing reasons, Plaintiffs bring this action individually and on behalf
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`of all Oregon purchasers of any of Defendants’ YT Subscriptions from the YT Platform who,
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`within the applicable statute of limitations period up to and including the date of judgment in this
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`action, incurred unauthorized fees for the renewal of their YT Subscriptions. Based on
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`Defendants’ unlawful conduct, Plaintiffs seek damages (including statutory and punitive
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`damages), restitution, declaratory relief, injunctive relief, reasonable attorneys’ fees and costs,
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`and any other relief as the Court may deem proper, for: (1) violation of Oregon’s Unlawful
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`Trade Practices Act (the “UTPA”), ORS 646.608(1)(ttt), based on Defendants’ failure to comply
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`with the ARL; and (2) violations of Oregon’s UTPA, ORS 646.608(1)(sss), based on
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`Defendants’ failure to comply with the FOL.
`
`THE PARTIES
`
`9.
`
`Plaintiff Victor Walkingeagle is a citizen of Oregon, residing in Portland, Oregon.
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`In or about December 2021, Mr. Walkingeagle signed up for a free trial of Defendants’ monthly
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`YouTube Music subscription from Defendants’ website while in Oregon. During the enrollment
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`process but before finally consenting to Defendants’ subscription offering, thereby completing
`
`the checkout process, Mr. Walkingeagle provided his debit card information directly to
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`Defendants. At the time Mr. Walkingeagle enrolled in his YT Subscription program, Defendants
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`did not disclose to Mr. Walkingeagle all required automatic renewal offer terms associated with
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`the subscription program or obtain Mr. Walkingeagle’s affirmative consent to those terms. For
`
`instance, at the time of enrollment, Mr. Walkingeagle was not aware that, upon the expiration of
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`Mr. Walkingeagle’s free trial subscription, Defendants would automatically convert his free trial
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`into a paid, automatically renewing subscription. Nor did Defendants adequately disclose the
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`length of Mr. Walkingeagle’s free trial or when the first charge would occur. Further, after Mr.
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`Walkingeagle completed his initial order, Defendants sent Mr. Walkingeagle an email
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`confirmation and receipt for his purchase of and enrollment in a YT Subscription (the
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`“Acknowledgment Email”). However, the Acknowledgment Email, too, failed to provide Mr.
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`Walkingeagle with the complete automatic renewal terms that applied to Defendants’ offer, a
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`description of Defendants’ full cancellation policy, or information regarding how to cancel Mr.
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`Walkingeagle’s YT Subscription in a manner capable of being retained by him.
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`Mr. Walkingeagle did not receive any other acknowledgement that contained the required
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`information. As a result, Mr. Walkingeagle was not placed on notice of several material terms
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`associated with his YT Subscription. In particular, Mr. Walkingeagle was not made aware of the
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`fact that his YT Subscription would automatically renew after the initial free trial period, of the
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`length of the free trial period, or of when the first charge would occur, and nor was he apprised
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`of the complete cancellation policy associated with his YT Subscription, the most crucial aspects
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`of which were missing from the Checkout Page and Acknowledgment Email. In any case, in or
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`around February 2022, approximately three months after Mr. Walkingeagle first signed up for
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`his free trial YT Subscription, Defendants automatically renewed Mr. Walkingeagle’s YT
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`Subscription and charged Mr. Walkingeagle’s Payment Method approximately $9.99, the full
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`monthly standard membership fee then associated with Defendants’ paid monthly YouTube
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`Music subscription. Further, Mr. Walkingeagle has been unable to cancel his YT Subscription
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`due to Defendants’ confusing cancellation policy, the most crucial aspects of which were missing
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`from the Checkout Page and the Acknowledgment Email. As a result, Mr. Walkingeagle is still
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`enrolled in, and continues to receive monthly renewal charges for, his YT Subscription to this
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`day, despite the fact that he does not want to remain subscribed or pay any further renewal fees.
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`Defendants’ missing and/or incomplete disclosures on the Checkout Page and in the
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`Acknowledgment Email, their failure to obtain Mr. Walkingeagle’s affirmative consent before
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`charging his Payment Method on a recurring basis, and their subsequent failure to issue a refund
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`of the unauthorized charges he incurred during the life of his subscription, are contrary to the
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`ARL, which deems products provided in violation of the statute to be an unconditional gift to
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`consumers. See ORS 646A.295; see also ORS 646.608(1)(ttt). Further, Defendants’ missing
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`and/or incomplete disclosures on the Checkout Page and their failure to obtain
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`Mr. Walkingeagle’s affirmative consent to the free trial offer terms associated with the YT
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`Subscriptions before charging his Payment Method on a recurring basis are contrary to the FOL,
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`which is an “unlawful practice subject to enforcement and penalty under” the UTPA. See
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`ORS 646.644(6); see also ORS 646.608(1)(sss). Had Defendants complied with the ARL and
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`FOL, Mr. Walkingeagle would have been able to read and review the auto renewal terms prior to
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`purchase, and he would have not subscribed to YouTube Music or he would have cancelled his
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`YT Subscription earlier, i.e., prior to the expiration of the initial subscription period and/or any
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`subsequent renewal term. As a direct result of Defendants’ violations of the ARL and FOL,
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`Mr. Walkingeagle suffered economic injury.
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`10.
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`Plaintiff Nathan Briggs is a citizen of Oregon, residing in Klamath Falls, Oregon.
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`In or about April 2021, Mr. Briggs signed up for Defendants’ monthly YouTube Music
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`subscription from Defendants’ website while in Oregon. However, as discussed below, Mr.
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`Briggs did not actually learn that his YT Subscription was an automatic renewal until late May
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`2022 or early June 2022. During the enrollment process but before finally consenting to
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`Defendants’ subscription offering, thereby completing the checkout process, Mr. Briggs
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`provided his debit card information directly to Defendants. At the time Mr. Briggs enrolled in
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`his YT Subscription program, Defendants did not disclose to Mr. Briggs all required automatic
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`renewal offer terms associated with the subscription program or obtain Mr. Briggs affirmative
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`consent to those terms. Further, after Mr. Briggs completed his initial order, Defendants sent Mr.
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`Briggs an Acknowledgment Email that, too, failed to provide Mr. Briggs with the complete
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`automatic renewal terms that applied to Defendants’ offer, a description of Defendants’ full
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`cancellation policy, or information regarding how to cancel Mr. Briggs’s YT Subscription in a
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`manner capable of being retained by him. Mr. Briggs did not receive any other
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`acknowledgement that contained the required information. As a result, Mr. Briggs was not
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`placed on notice of several material terms associated with his YT Subscription. Approximately
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`one month after enrollment, in or around May 2021, Defendants automatically renewed
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`Mr. Briggs’s YT Subscription and charged Mr. Briggs’s Payment Method approximately $9.99,
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`the full monthly standard membership fee then associated with Defendants’ paid monthly
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`YouTube Music subscription. Immediately after seeing Defendants’ charge to his Payment
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`Method in late May or early June (upon review of his bank statement for May) – and, as a result
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`of which, learning for the first time that his YT Subscription was an automatic renewal for which
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`he would receive recurring monthly charges – Mr. Briggs promptly attempted to cancel his YT
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`Subscription, which he struggled to do due to Defendants’ obscured, confusing, and time
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`consuming cancellation policy. However, finding no useful guidance in the vague and
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`incomplete terms that were presented to him on the Checkout Page at the point of sale and later
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`in the Acknowledgement Email, Mr. Briggs struggled immensely with the cancellation process.
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`Ultimately, Mr. Briggs was only able to affect cancellation, and thereby stop Defendants from
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`automatically charging his Payment Method on a recurring basis, by altogether cancelling his
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`debit card through his bank. Defendants’ missing and/or incomplete disclosures on the Checkout
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`Page and in the Acknowledgment Email, their failure to obtain Mr. Briggs’s affirmative consent
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`before charging his Payment Method on a recurring basis, and their subsequent failure to issue a
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`refund of those unauthorized charges, are contrary to the ARL, which deems products provided
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`in violation of the statute to be a gift to consumers. See ORS 646A.295. Had Defendants
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`complied with the ARL, Mr. Briggs would have been able to read and review the auto renewal
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`terms prior to purchase, and he would have not subscribed to YouTube Music or he would have
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`cancelled his YT Subscription earlier, i.e., prior to the expiration of the initial subscription period
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`and/or any subsequent renewal term. As a direct result of Defendants’ violations of the ARL,
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`Mr. Briggs suffered economic injury
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`11.
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`Defendant Google LLC (“Google”) is a Delaware limited liability company with
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`its principal place of business at 1600 Amphitheatre Parkway, Mountain View, California 94043.
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`Google has done business throughout Oregon and throughout the United States at all times
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`during the Class Period. At all relevant times, acting alone or in concert with others, Google has
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`advertised, marketed, sold, and distributed the YT Subscriptions and all products and services
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`pertaining thereto, to consumers in Oregon and throughout the United States. At all relevant
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`times, acting alone or in concert with Defendant YouTube, LLC, Google formulated, directed,
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`controlled, had the authority to control, and/or participated in the acts and practices set forth in
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`this Complaint.
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`12.
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`Defendant YouTube, LLC (“YouTube”) is a Delaware limited liability company
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`with its principal place of business at 901 Cherry Avenue, San Bruno, California 94066.
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`YouTube is a wholly owned subsidiary of Google, and it has done business throughout Oregon
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`and throughout the United States at all times during the Class Period. At all relevant times,
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`acting alone or in concert with Defendant Google, YouTube advertised, marketed, sold, and
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`distributed the YT Subscriptions and all products and services pertaining thereto, to consumers in
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`Oregon and throughout the United States. At all relevant times, acting alone or in concert with
`
`Defendant Google, YouTube formulated, directed, controlled, had the authority to control, and/or
`
`participated in the acts and practices set forth herein.
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`13.
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`Defendants Google and YouTube (collectively, “YouTube” or “Defendants”) own
`
`and operate the YouTube Platform, which contains, among other things, videos and music
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`created by individuals and entities that have registered with YouTube, created a “channel,” and
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`uploaded their content to that channel for public consumption. In fact, YouTube is “the
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`dominant provider of online video in the United States[,]” and has been for more than a decade.3
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`Defendants also offer access to certain exclusive YouTube content, products, and/or services on
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`a contract or fee basis to customers who enroll in a YT Subscription. Defendants wholly own
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`and operate the YT Subscriptions, which include YouTube TV, YouTube Music, and YouTube
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`Premium. Defendants are also responsible for the promotion, advertisement, marketing, and/or
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`sale of the YT Subscription programs, and they own and operate the YT Website and Apps,
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`where they market and sell their YT Subscriptions. Defendants sell their YT Subscriptions in
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`Oregon and have transacted in and throughout Oregon and throughout the United States at all
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`times during the Class Period. In connection with the YT Subscriptions, Defendants made
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`automatic renewal offers to consumers in Oregon and throughout the United States via the YT
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`Website and YT Apps during the Class Period.
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`14.
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`Plaintiffs reserve the right to amend this Complaint to add different or additional
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`defendants, including without limitation any officer, director, employee, supplier, or distributor
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`of Defendants who has knowingly and willfully aided, abetted, and/or conspired in the false and
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`deceptive conduct alleged herein.
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`JURISDICTION AND VENUE
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`15.
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`This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332(d)(2)(A),
`
`as amended by the Class Action Fairness Act of 2005 (“CAFA”), because this case is a class
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`action where the aggregate claims of all members of the proposed class are in excess of
`
`
`3 Comscore Releases May 2010 U.S. Online Video Rankings, Comscore (Jun. 24, 2010),
`https://www.comscore.com/Insights/Press-Releases/2010/6/comScore-Releases-May-2010-US-Online-
`Video-Rankings?cs_edgescape_cc=US.
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`$5,000,000.00, exclusive of interest and costs, there are over 100 members of the putative class,
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`and Plaintiffs, as well as most members of the proposed class, are citizens of a state different
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`from Defendants.
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`16.
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`This Court has personal jurisdiction over the parties because Plaintiffs reside in
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`Oregon and submit to the jurisdiction of the Court, and because Defendants have, at all times
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`relevant hereto, systematically and continually conducted business in Oregon, including within
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`this District, and/or intentionally availed itself of the benefits and privileges of the Oregon
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`consumer market through the promotion, marketing, and sale of its products and/or services to
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`residents within this District and throughout Oregon. Additionally, Plaintiffs purchased their YT
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`Subscriptions from Defendants while in Oregon.
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`17.
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`Pursuant to 28 U.S.C. § 1391, this Court is the proper venue for this action
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`because a substantial part of the events, omissions, and acts giving rise to the claims herein
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`occurred in this District. Also, Plaintiffs reside in this District and purchased Defendants’ YT
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`Subscription in this District. Moreover, Defendants systematically conduct business in this
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`District and throughout the State of Oregon, and they distributed, advertised, and sold the YT
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`Subscriptions to Plaintiffs and Class Members in this State and District. The Portland Division is
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`the appropriate venue because, as explained below, a substantial part of the events giving rise to
`
`the claims occurred in this division.
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`FACTUAL BACKGROUND
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`Background On The Subscription e-Commerce Industry
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`The e-commerce subscription model is a business model in which retailers
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`A.
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`18.
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`provide ongoing goods or services “in exchange for regular payments from the customer.”4
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`Subscription e-commerce services target a wide range of customers and cater to a variety of
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`specific interests. According to an October 2020 report by Juniper Research5, “multiservice
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`subscriptions, that provide several services for a single cost, … will be led by offerings from tech
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`conglomerates,” such as YouTube.6 Given the prevalence of online and e-commerce retailers,
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`subscription e-commerce has grown rapidly in popularity in recent years. Indeed, the
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`“subscription economy has grown more than 400% over the last 8.5 years as consumers have
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`demonstrated a growing preference for access to subscription services[.]”7 Analysts at UBS
`
`predict that the subscription economy will expand into a $1.5 trillion market by 2025, up from
`
`///
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`///
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`///
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`///
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`4 Core DNA, How to Run an eCommerce Subscription Service: The Ultimate Guide (May 19, 2020),
`https://www.coredna.com/blogs/ecommerce-subscription-services.
`
`5 Juniper Research, one of the leading analyst firms in the mobile and digital tech sector, specializes in
`identifying and appraising new high growth market sectors within the digital ecosystem and provides
`research and analytical services to the global hi-tech communications sector, as well as consultancy,
`analyst reports, and industry commentary. See https://www.juniperresearch.com/about-us.
`
`6 Juniper Research, Subscriptions for Physical Goods to Overtake Digital Subscriptions by 2025;
`Growing to Over $263Bn Globally (Oct. 12, 2020), https://www.juniperresearch.com/press/subscriptions-
`for-physical-goods-to-overtake.
`
`7 Business Insider, Taco Bell’s taco subscription is rolling out nationwide — here’s how to get it (Jan. 6,
`2022), https://www.businessinsider.com/taco-bell-subscription-launching-across-the-country-2022-1
`(internal quotation marks omitted).
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`$650 billion in 2020.8 That constitutes an average annual growth rate of 18%, which makes the
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`subscription economy “one of the fastest-growing industries globally.”9 And, by all accounts,
`
`Defendants played a major role in spurning this rapid growth.
`
`19.
`
`Defendants launched YouTube Red (now YouTube Premium10), in or around
`
`October 2015. Through YouTube Premium, Defendants provide subscribers with access to,
`
`among other things, ad-free all content on the YouTube Platform, YouTube’s premium original
`
`series, and films produced by YouTube personalities, as well as background playback of content
`
`on mobile devices. Additionally, in or around February 2017, Defendants launched YouTube
`
`TV, another subscription-based service offering, among other things, live streams of
`
`programming from major broadcast television networks and channels.11 Finally, in May 2018,
`
`
`8 See UBS, Investing in digital subscriptions (Mar. 10, 2021), https://www.ubs.com/global/en/wealth-
`management/our-approach/marketnews/article.1525238.html (“[A]t close to USD 650 billion in 2020, we
`expect the subscription economy to expand into a USD 1.5 trillion market by 2025, implying an average
`annual growth rate of 18%.”).
`
`See also Subscribed, UBS Declares: It’s Worth Investing in the Subscription Economy (Apr. 17, 2021),
`https://www.subscribed.com/read/news-and-editorial/ubs-declares-its-worth-investing-in-the-
`subscription-economy; Business 2 Community, The Subscription Economy Is Booming Right Now. But
`Are You Reaping the Full Benefits? (Oct. 7, 2021),
`https://www.business2community.com/ecommerce/the-subscription-economy-is-booming-right-now-but-
`are-you-reaping-the-full-benefits-02434851.
`
`9 UBS, Investing in digital subscriptions (Mar. 10, 2021), https://www.ubs.com/global/en/wealth-
`management/our-approach/marketnews/article.1525238.html (“[Growth] was seen across many areas,
`including e-commerce, video streaming, gaming, cloud-based applications, etc.”); see also Juniper
`Research, Subscriptions For Physical Goods To Overtake Digital Subscriptions By 2025; Growing To
`Over $263bn Globally (Oct. 12, 2020), https://www.juniperresearch.com/press/subscriptions-for-
`physical-goods-to-overtake (acknowledging “the significant lead the digital sector has had in th[e]
`area[ of digital service subscriptions]”).
`
`10 Defendants announced the re-branding of YouTube Red as YouTube Premium in May 2018. See
`YouTube to launch new music streaming service, The Guardian (May 17, 2018),
`https://www.theguardian.com/music/2018/may/17/youtube-music-new-streaming-service-launch
`(“YouTube Red – the ad-free, paid-for version of YouTube – will be renamed YouTube Premium and
`include access to YouTube Music. Existing subscribers will continue to pay $9.99 a month, while new
`subscribers will pay $11.99.”).
`
`11 See YouTube is Officially in the Live TV Game Now, Gizmodo (Apr. 2017),
`https://gizmodo.com/youtube-is-officially-in-the-live-tv-game-now-1794049030.
`
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`Case 3:22-cv-00763-MO Document 19 Filed 09/06/22 Page 15 of 95
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`Defendants announced the launch of YouTube Music, a third subscription-based service oriented
`
`towards streaming and discovering music content hosted on the YouTube Platform.12
`
`20.
`
`As noted above, the production, sale, and distribution of subscription-based
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`products and services is a booming industry that has exploded in popularity over the past few
`
`years. According to Forbes, “[t]he subscription e-commerce market has grown by more than
`
`100% percent a year over the past five years, with the largest retailers generating more than
`
`$2.6B in sales in 2016, up from $57.0M in 2011.”13 Following 2016, market growth within the
`
`industry increased exponentially, reaching $650 billion in 2020.14 “As such, the financials of
`
`companies with subscription business models[] … improved dramatically in 2020 thanks to
`
`limited revenue volatility and strong cash flow generation.”15 Thus, “[t]he share prices of most
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`subscription companies have performed well in recent years.”16
`
`21.
`
`The expansion of the subscription e-commerce market shows no signs of slowing.
`
`“We’re now in the subscriptions era, and the pandemic is accelerating its takeover. During the
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`COVID-19 lockdowns, many digital-based subscription business models fared well due to their
`
`promise of convenience and strong business continuity.”17 According to The Washington Post,
`
`“[s]ubscriptions boomed during the coronavirus pandemic as Americans largely stuck in
`
`
`12 See Google announces YouTube Music and YouTube Premium, The Verge (May 17, 2018),
`https://www.theverge.com/2018/5/17/17364056/youtube-music-premium-google-launch.
`
`13 Forbes, The State Of The Subscription Economy, 2018 (Mar. 4, 2018), available at
`https://www.forbes.com/sites/louiscolumbus/2018/03/04/the-state-of-the-subscription-economy-
`2018/#6ad8251a53ef.
`
`14 See UBS, Investing in digital subscriptions (Mar. 10, 2021), available at
`https://www.ubs.com/global/en/wealth-management/our-approach/marketnews/article.1525238.html.
`
`15 Id.
`
`16 Id.
`
`17 UBS, Investing in digital subscriptions (Mar. 10, 2021), https://www.ubs.com/global/en/wealth-
`management/our-approach/marketnews/article.1525238.html.
`
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`Case 3:22-cv-00763-MO Document 19 Filed 09/06/22