SiriusXM Falsely Advertises Its Plans at Lower Prices Than It Charges: Class Action

SiriusXM fails to include in its advertised prices the amount of its “invented U.S. music royalty fee,” which increases “the true plan price by a whopping 21.4% above and beyond the advertised price for the plan,” alleges the complaint. SiriusXM doesn’t “concede in any way” that the allegations in the complaint are accurate, that SiriusXM committed any of the violations of law alleged in the complaint, or that the plaintiffs have asserted claims upon which relief can be granted, said its notice of removal Monday (docket 3:23-cv-02367). SiriusXM also concedes “neither liability” on the plaintiffs’ claims “nor the propriety of the relief sought,” it said.

SiriusXM intentionally doesn’t disclose the music royalty fee, said the complaint. “Once consumers have been lured to sign up, SiriusXM prevents them from learning about its scheme by never thereafter sending its customers ongoing bills or payment receipts,” it said. “All the while, Sirius silently and automatically renews their subscriptions month after month.”

If a subscriber happens to notice the fee was charged and then contacts SiriusXM to inquire about it, the company “has a policy and practice of falsely telling the subscriber that it is a government-related fee and/or that it is outside of SiriusXM’s control,” said the complaint. SiriusXM had 2022 subscriber revenue of $6.37 billion, of which 21.4% was drawn from payments of the fee, it said.

Stevenson and Ambrose seek injunctive relief “to protect the general public by putting an end to SiriusXM’s unlawful advertising scheme,” said the complaint. They also seek declaratory relief, including a declaration “that SiriusXM’s arbitration clause is unconscionable and/or unenforceable, and a declaration that SiriusXM’s practices alleged herein are unlawful under California law,” it said.

The plaintiffs also seek restitution, on behalf of themselves and a class and subclasses of California SiriusXM subscribers, “including disgorgement of all revenues and/or unjust enrichment SiriusXM obtained from them as a result of the unlawful conduct,” said the complaint. They alternatively seek damages for breach of the implied covenant of good faith and fair dealing “in the amount of their overpayments, which resulted from SiriusXM’s deceptive automatic renewal practices,” it said.

The plaintiffs aren’t seeking “to regulate the existence or amount” of the fee, though they contend the name of the fee is “deceptive,” said the complaint. SiriusXM intentionally calls it a “U.S.” fee “to trick consumers into thinking it is a government-related fee,” it said. The plaintiffs only want SiriusXM to include the amount of the fee “in the music plan prices it advertises to the general public,” and to “adequately disclose” the fee “and its true nature and basis,” it said.

Subscribers of the SiriusXM app who are signed up and billed through the Apple App Store or Google Play Store are not charged the fee, said the complaint. SiriusXM “invented and first added” the fee to its music plans in 2009, at a 13.9% flat rate charge, it said. SiriusXM has since increased it to the 21.4% rate, it said.

SiriusXM is required to have royalty arrangements with two holders of musical composition copyrights and the owners of sound recording copyrights, said the company’s most recent 10-K report at the SEC: “These music licensing arrangements are complex.”