Tinder will provide an estimated $17.3 million in subscription features and cash to settle an age discrimination suit which claims the company overcharged its older generation of dating app users.
Tinder’s policy of charging an extra $10 per month to its Tinder Plus users over the age of 30 has been called a violation of California’s Unruh Civil Rights Act. Tinder’s public statements on the matter were used against them, including the justification for the price differential offered by its vice president of corporate communications, who said “Younger users are just as excited about Tinder Plus, but are more budget constrained, and need a lower price to pull the trigger.”
A California Court of Appeals ruling decried this explanation, responding “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.”
It is possible to justify differential pricing to different customer groups. For instance, children and seniors often pay less for items such as movie tickets and amusement park admissions. Under the Robinson-Patman Act, price discriminations are generally lawful, particularly if they reflect the different costs of dealing with different buyers or are the result of a seller’s attempts to meet a competitor’s offering. The Supreme Court has ruled that such price discrimination claims should be evaluated consistent with broader antitrust policies. One can defend against an alleged Robinson-Patman violations by demonstrating either (1)the price difference is justified by different costs in manufacture, sale, or delivery (e.g., volume discounts) or (2) the price concession was given in good faith to meet a competitor’s price.
Expert witnesses are often employed to analyze the existence and damages from unlawful price discrimination.