San Francisco District Attorney Announces Consumer Protection Settlement with Dropbox, Inc.
CONTACT: ALEX BASTIAN (415) 553-1931 | NIKESH PATEL (415) 734-3205
SAN FRANCISCO – Today, San Francisco District Attorney George Gascón, along with Alameda County DA Nancy O'Malley, San Diego County DA Summer Stephan and Sonoma County DA Jill Ravitch announced that their offices have settled a consumer protection action against Dropbox, Inc., a company that provides file-sharing and other related services over the internet. Under the settlement, Dropbox has agreed to permanent injunctive relief, pay civil penalties, and set aside a fund for restitution purposes. The civil action was filed in Alameda County Superior Court.
"California consumer protection laws are designed to safeguard the interests of consumers and foster fair business practices," said District Attorney George Gascón. "Companies that enroll their customers in services that automatically renew must do so in accordance with the letter of the law."
According to the complaint, Dropbox offered paid services known as "Dropbox Pro" and "Dropbox for Business." Both services were available on an "automatic renewal" basis, that is, the subscription renewed without further action on the part of the customer, until cancellation. The complaint alleges that Dropbox violated California's Automatic Renewal Law with respect to Dropbox Pro by failing to display the automatic renewal terms in the manner required by law and by failing to get the consumer's affirmative consent to the agreement containing those terms.
As for Dropbox Business, the complaint alleges that the company failed to sufficiently advise consumers using it for personal, family or household reasons (without, alternatively, complying with the Automatic Renewal Law).
Under the terms of the court-approved judgement, $450,000 has been set aside to administer and fund restitution to qualifying California consumers. You may be an eligible consumer if, while residing in California either (i) you purchased Dropbox Pro between February 24, 2013 and August 1, 2014, and did not use the service more than 30 days after first paying for it; or (ii) you purchased Dropbox Business for personal, family or household reasons (that is, not for a business or organization) and did not use the service more than 30 days after paying for it. Other conditions also apply to refund eligibility.
Consumers who believe they are entitled to restitution should call 866-670-3373 and/or visit the following website:www.DropboxRestitution.com. The restitution fund remains available for a period of one year.
Without admitting liability, Dropbox also agreed to pay $1.6 million in civil penalties and $100,000 to reimburse the costs of investigation. Dropbox cooperated fully in the investigation and, as part of the settlement, agreed to make changes to its website. The appropriate party to contact at Dropbox for further information is Elisa Pandolfi,Elisa@dropbox.com.