Do you automatically renew subscriptions or service contracts for consumers? If so, your terms and conditions may contain provisions that are not binding on your customers—even if you have used those terms for many years. A judgment of the Administrative High Court for Trade and Industry dated 1 September 2026 shows that incorrect renewal and cancellation terms can also lead to enforcement action by the Netherlands Authority for Consumers and Markets (ACM) and substantial costs.

The facts

A business offered a paid membership through its website, allowing consumers to participate in puzzles and prize competitions.

Under the terms and conditions, after the first year the membership was automatically renewed each time for another year. Customers could not cancel during that new year. Cancellation was also only permitted in writing and with a signature, whereas consumers could sign up for the membership online. Anyone who cancelled contrary to the conditions risked a penalty equal to three times the membership fee.

The ACM intervened and imposed an order subject to periodic penalty payments on the business in 2022: it had to change its practices or face a financial penalty. Among other things, it had to amend its terms, stop threatening customers with the penalty, and actively inform existing customers of the amended terms.

The business challenged the decisions but was unsuccessful before the Tribunal.

The legal issue

Automatic renewal does not mean that you may bind a consumer for another full year.

As a general rule for consumer subscriptions and agreements for the regular supply of goods or services, following tacit renewal the consumer must be able to cancel at any time, subject to a notice period of no more than one month. Different rules apply to, among other things, newspapers and magazines.

A clause that binds the consumer for another year without an interim right of cancellation appears on the statutory ‘black list’. This list contains terms that the law deems unreasonably onerous for consumers. A consumer may have such a clause voided and will then not be bound by it.

If you wish to agree a new fixed term of twelve months with the consumer, the consumer must expressly agree to it.

Make clear what offer you are making and which term and which conditions apply. The mere absence of a cancellation is insufficient.

This distinction determines whether you can hold the customer to the new annual term and claim payment for that entire period.

The judgment also contains two important lessons:

– If customers can sign up online, they must also be able to cancel online. The business could not require cancellation exclusively in writing and with a signature when customers were able to take out the membership online.

– Threatening a penalty may constitute an aggressive commercial practice. The business used the penalty clause to put pressure on consumers who wanted to cancel. That practice was also prohibited.

Merely amending the terms was not enough. The ACM had required the business to actively inform existing customers about the amended terms. A notice visible only to members who logged into the website did not satisfy that obligation.

Because the business failed to comply fully with the ACM’s order, it ultimately had to pay the maximum penalty of €240,000, plus statutory interest.

Legally sharp – tips for businesses

– Check what happens after the initial term. Do not look only at the original contract term. Following automatic renewal, can consumers cancel at any time with no more than one month’s notice? Also check whether different rules apply to your type of subscription.

– Make cancellation as accessible as sign-up. If consumers can take out the subscription online, ensure that they can also cancel it online. Check both your terms and the way your customer service team handles cancellation requests.

– Inform existing customers when correcting invalid terms. Merely changing the text on your website does not eliminate the consequences of earlier errors. Clearly explain to affected customers what has changed and what it means for them. If the ACM has imposed measures, implement them fully and on time.

– Distinguish between consumers and business customers. Consumers benefit from additional statutory protection. There is generally more freedom to agree tailored terms with business customers. Therefore, do not automatically use the same terms for both groups.

Review your terms and conditions using the questions below

– Do you distinguish between consumers and business customers?
– Do your renewal and cancellation rules comply with the law?
– Can customers cancel in the same way in which they entered into the contract?
– Does your customer service team also apply those rules in practice?
– Do you inform existing customers when correcting invalid terms?

Prevent incorrect terms from costing you money

Incorrect terms may mean that customers do not have to pay the amounts you demand, or that you must refund amounts already paid. The ACM may also intervene. If you then fail to implement imposed measures fully, the costs may increase further.

Therefore, check not only what your terms say, but also how you apply them: when renewing, when processing cancellations, and when remedying earlier errors.

Contact

Do you have questions about tacit renewal or your terms and conditions? Please feel free to contact us at info@acginter.com.