Alameda County District Attorney Nancy E. O’Malley announced yesterday a consumer protection settlement between DropBox and the Alameda, San Diego, San Francisco, and Sonoma Counties in California over auto-renewing of paid subscriptions. As part of this settlement and without admitting fault, DropBox has agreed to pay $1.6 million in civil penalties, $100 thousand to reimburse investigation costs, and $450,000 set aside for restitution to California residents.
According to the settlement announcement, DropBox was allegedly offering “DropBox Pro” and “DropBox for Business” subscriptions that auto-renew in a way that violates California’s Automatic Renewal Law. It was stated that the “DropBox Pro” service was not adequately disclosing that the paid subscription would be auto-renewed and that consumers were not giving affirmative consent to the auto-renew of their subscriptions.
For the “DropBox for Business”service, the California counties stated that DropBox did not properly indicate that this product was not intended for consumers and for personal use. Strangely, even though the name of the service contained the word “Business”, this too caused it to violate auto-renew laws.
A web site has been created at www.DropboxRestitution.com where California consumers who think they are entitled to a refund can submit a claim.
A Dropbox spokesperson has told BleepingComputer “We believe that our policies have been fair, transparent, and in compliance with applicable law, but we’re pleased to have resolved this matter. Being worthy of trust is a core value of Dropbox and we’ll continue striving to earn and maintain the trust of our users”.