Arlo's End-of-Life Cloud Storage Policy a 'Breach of Contract': Complaint

Arlo Technologies' first "End-of-Life Policy,” disclosed Jan. 1 to existing customers who bought the company’s security cameras, was a breach of contract and violation of consumer protection laws, alleged a Monday class action (docket 5:23-cv-00534) in U.S. District Court for Northern California in San Jose.

Texas plaintiff Henry Carter bought a three-camera Arlo security kit in July 2020 with the understanding seven days of free cloud storage would be provided for the life of the product based on company marketing statements touting the feature as a differentiator from competitors' products, the complaint said.

Arlo's product packaging said the rolling seven-day free storage feature, part of the basic plan, would be provided without a contract or a monthly fee for up to five cameras per account. The defendant "foresaw that consumers would find these statements and associated omissions" critical to the purchase decision, "as indicated by its decision to market and advertise that feature in multiple prominent positions on its packaging and website,” said the complaint.

Arlo notified Carter in January that seven-day free cloud storage “may be reduced or unavailable” upon each product’s end-of-life effective date -- either April 1 or Jan. 1, the complaint said. But product packaging and advertising materials didn’t include any statements informing consumers that they would have access to seven-day free cloud storage for only a limited time or that the feature would be “reduced” or “rendered unavailable” after their purchase, the complaint said. Consumers wouldn’t expect that after buying one of Arlo’s products, the company would “reduce” or make “unavailable” the primary feature that attracted them to the product in the first place, the plaintiff said.

The defendant violated the California Consumers Legal Remedies Act, California False Advertising Law and Unfair Competition Law, alleged the complaint, also claiming breach of contract and unjust enrichment. Plaintiff disputes the company’s arbitration clause and “Class Action Waiver” in the company’s terms of service, alleging the agreement and waiver are void and “unenforceable” for being “impermissibly ambiguous.”

Terms of service are void of terms that guide customers in determining whether Judicial Arbitration and Mediation Services or the American Arbitration Association will host an arbitration proceeding, said the complaint. The plaintiff seeks a permanent injunction enjoining Arlo from effecting the end-of-life policy and reducing the seven-day free cloud storage feature. He's also seeking actual and statutory damages, plus attorneys’ fees and legal costs.