Court "Swipes Left" on Tinder's Pricing Model
A California appeals court has ruled that the Tinder dating app must stop charging older users more for its premium service.
As the court's opinion noted,
The original app began, and is still offered, as a free online dating service. It presents users with photos of potential dates. The user can swipe right to express approval, or swipe left to express disapproval. In March 2015, Tinder released a premium service called “Tinder Plus,” which allows users to access additional features of the app for a monthly fee.
The plaintiff in the case, Allan Candledore, filed suit on behalf of himself and a putative class of California Tinder subscribers who were over 30.
The complaint alleged that consumers 30 and over were charged $19.99 per month for Tinder Plus, while consumers under the age of 30 paid only $9.99 or $14.99.
Candelore sued for age discrimination in violation of California's Unruh Civil Rights Act and the California Unfair Competition Law.
As NPR reported,
Tinder has argued that the pricing difference on its Tinder Plus service was based on market research finding "customers age 30 and younger have less capacity to pay for premium services" and they "need a lower price to pull the trigger."
The trial court sided with Tinder, ruling that Tinder's pricing model wasn't "arbitrary or invidious discrimination" because it was reasonably based on market testing showing “younger users” are “more budget constrained” than older users.
The trial court concluded that Tinder's two-tier pricing model was justified by public policies:
- increased access to services for the general public, and
- profit maximization by the vendor, "a legitimate goal in our capitalistic economy."
Breaking the Mold
However, on appeal, the court noted that
No matter what Tinder’s market research may have shown about the younger users’ relative income and willingness to pay for the service, as a group, as compared to the older cohort, some individuals will not fit the mold. Some older consumers will be “more budget constrained” and less willing to pay than some in the younger group. We conclude the discriminatory pricing model, as alleged, violates the Unruh Act and the UCL to the extent it employs an arbitrary, class-based, generalization about older users’ incomes as a basis for charging them more than younger users.
The court of appeals pointed to an earlier California Supreme Court case involving "Ladies Night" bar discounts to reject Tinder's argument:
vendors may pursue legitimate business interests by making economic distinctions among customers, [if] they employed criteria that could conceivably be met by any customer, regardless of the customer’s personal characteristics.
In other words, a consumer can't just decide to be under 30.
The appeals court distinguished other cases of age-based discrimination that were considered reasonable:
For example, it is permissible to exclude children from bars or adult bookstores because it is illegal to serve alcoholic beverages or to distribute ‘ “harmful matter” ’ to minors.... This sort of discrimination is not arbitrary because it is based on a ‘compelling societal interest’...
Having ruled that Tinder's pricing practices were improper, the court concluded, "Accordingly, we swipe left, and reverse."