Say someone advertises for their website and says "Its 100% free to sign up" then have them check a checkbox acknowledging that the owner of the site can cancel the service for any reason when they are signing up.
Now 5 months later the owner of the site sends the user an email saying "If you don't start paying us $20 a month we will shut down your service". Is that extortion? false advertising? or in any way illegal?
Is that extortion? false advertising? or in any way illegal?
Not at all. The owner of the site is simply exercising his right as outlined in the terms and conditions from when the user signed up. And giving users an option for continued use of the site (that is, for him not to exercise a right of which they were always aware) does not constitute extortion.
This is perfectly fine, unless you have a contract which states that they must continue to provide free service until a certain date.
If anything, they're doing the right thing by notifying you that things will change so that you can make other arrangements if needed. If they started charging you $20/mo. without your agreement, that would be illegal.
While threats to do something that's harmful for you are a key component of extortion, those threats generally (there are additional, separate provisions for threatening to exposing secrets etc) need to be unlawful .
For example, if I haven't paid the bills for some service and they send a letter "pay up or we'll disconnect you, bill you a penalty, and sue you" that's not extortion because they're allowed to disconnect me, assess contractual penalties, and sue me in court. However, if they send a letter saying "pay up or we'll disconnect you, and kick your dog while we do so" then that might be treated as extortion because it includes a threat of unlawful violence.
For a random jurisdiction example, let's take a look at the California Penal code (emphasis mine):
- (a) Extortion is the obtaining of property or other consideration from another, with his or her consent, or the obtaining of an official act of a public officer, induced by a wrongful use of force or fear, or under color of official right.
Take note that rightful use of force or fear is not covered.
- Fear, such as will constitute extortion, may be induced by a threat of any of the following: 1. To do an unlawful injury to the person or property of the individual threatened or of a third person.
Threats to do lawful injury - i.e. taking lawful acts that will harm the other person (or, more likely, their property) in some way - are not covered by this section, and are not extortion if they don't fall under one of the other prohibited actions:
- To accuse the individual threatened, or a relative of his or her, or a member of his or her family, of a crime.
- To expose, or to impute to him, her, or them a deformity, disgrace, or crime.
- To expose a secret affecting him, her, or them.
- To report his, her, or their immigration status or suspected immigration status.
The other parts that can define extortion clearly don't apply here, only the first (threat of unlawful injury to person or property) is under discussion.
This actually happens all the time and isn't considered extortion.
Essentially, this is nothing more or less than a free service getting monetized after a while. This happens many times per year. For example, earlier this year the Have I been Pwned API has switched from free to paid because of the large amount of abuse: https://www.troyhunt.com/authentication-and-the-have-i-been-pwned-api/. Another example is Jessa Jones, a New York mother who started fixing broken iPhones for free so she could learn how to fix her own broken iPhone and ended up starting a business to repair iOS devices other shops wrote off as lost causes: https://www.vice.com/en_us/article/pa79bz/he-was-murdered-in-a-hate-crime-she-brought-his-blood-soaked-phone-back-to-life-v26n4
Such a transition is completely legal, simply because this is how a lot of companies start: someone with a particular skill or idea makes this skill or a service based on this idea available for free, notices that it very popular and takes a lot of his free time, and decides to start charging a fee to discourage frivolous use and to monetize his skills. This is not meaningfully different from a company that already charges a subscription fee raising their prices.
If a user decides they do not want to pay the new price for the service, they're allowed to stop using the service and/or switch to a different service. This is the market of basic capitalism at work and a law that would curtail this would instead lead to many people who start doing something for free eventually just stopping to do so when it becomes overwhelming, instead of monetizing their activity.
