March 2018

California Case of the Month: Court of Appeals Swipes Left on Tinder’s Discriminatory Pricing Model

By Phillip Simpler

Paul, Plevin, Sullivan & Connaughton LLP

Candelore v. Tinder, Inc. 2018 WL 580246 (Cal. Ct. App. Jan. 29, 2018)

Whether you use Tinder or not, I’m sure most reading this article would be surprised to learn that there is an option to pay a monthly fee to access premium features, such as unlimited likes, five “super likes” per day, and to rewind your last swipe. Exciting stuff, right? If you are a Tinder user over 30-years-old, I have some more good news for you: The California Court of Appeals recently struck down Tinder’s policy of charging you twice as much for these services than users under 30-years-of-age.

Background and Procedure

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. According to the complaint, the fee depended entirely on the users’ age. Users over 30-years-old were charged twice the amount of their counterparts under 30 for the same services.

The plaintiff, Allan Candelore, filed a class action complaint on behalf of California Tinder Plus users who were over the age of 30. Candelore sued for age discrimination in violation of the Unruh Civil Rights Act (Civ. Code, § 51) and the Unfair Competition Law (“UCL”) (Bus. & Prof. Code, § 17200 et seq.).

Tinder filed a demurrer, arguing the complaint failed to state a claim because (1) age-based pricing does not “implicate the irrational, invidious stereotypes” that the Unruh Act was intended to proscribe; (2) a public statement by Tinder's executive, as quoted in the complaint, “refute[d] any notion that the alleged discrimination in pricing [was] arbitrary;” and (3) age-based pricing is neither “unlawful” nor “unfair” under the UCL. The trial court sustained Tinder's demurrer without leave to amend, ruling in part that Tinder's age-based pricing practice did not constitute arbitrary or invidious discrimination because it was reasonably based on market testing showing “younger users” are “more budget constrained” than older users, “and need a lower price to pull the trigger.”’

Candelore appealed the decision.

The Court of Appeals Rejects Tinder’s Arguments

The Court of Appeals concluded that Tinder’s 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 Unruh Act's “fundamental purpose” is “to secure to all persons equal access to public accommodations ‘no matter’” their personal characteristics. To accomplish this purpose, the Act prohibits “arbitrary discrimination by business establishments.”

To reach its conclusion, the Court embraced the “individual nature” of the Unruh Act, as stated by the California Supreme Court in Marina Point, Ltd. v. Wolfson (1982) 30 Cal.3d 723, 725, meaning that a business cannot treat a class of individuals based on a generalization that does not apply to all members of the class.

In Marina Point, the defendant landlord implemented an ‘adults-only policy’ excluding families with minor children from becoming tenants on basis that minors were more likely to cause disruption to the rest of the community. While the landlord retained the right to exclude those that interfered with the landlord’s legitimate business pursuits, the Unruh Act did “not permit [the landlord] to exclude an entire class of individuals on the basis of a generalized prediction that the class ‘as a whole’ is more likely to commit misconduct than some other class of the public.”

Here, Tinder attempted to justify its pricing model on the basis that users under 30 are generally more budget constrained than their older counterparts, and thus, it was reasonable for Tinder to provide a discount to that group of individuals. The Court rejected this rationale based on the principles articulated in Marina Point:

“Were Tinder's justification sufficient, generalizations about the relative incomes of different age groups could be employed to rationalize higher prices for all consumers 30 and older in even the most essential areas of commerce — such as grocery shopping, gasoline purchases, etc.— even in instances where an individual did not in fact enjoy the economic advantages that are presumed about his or her age group as a whole. It is inconceivable that an antidiscrimination law like the Unruh Act would countenance a grocer charging an unemployed 31-year-old patron twice as much as an employed 28-year-old customer merely on the basis of market testing showing that those over the age of 30 ‘as a group’ generally earn more than 18- to 29-year-olds.”

You may be thinking – wait a minute – how is this any different from a senior citizen or student discount? Why do they get to have all the fun, while those of us under 30 have to pay full price to rewind our last swipe and utilize unlimited likes? The Court addressed this issue. Cases upholding age-based price discounts “were independently justified by social policy considerations evidenced in legislative enactments” such as statutes limiting child employment, and providing assistance for seniors. Thus, while such pricing models generally run counter to the Unruh Act, treating children and seniors differently from the rest of the public is supported by “a strong public policy in favor of such treatment.”

At least according to the Court of the Appeals, no such public policy supports encouraging those under 30-years-old to use Tinder’s premium features: “whatever interest society may have — if any — in increasing patronage among those under the age of 30 who may be interested in the premium features of an online dating app, that interest is not sufficiently compelling to justify discriminatory age-based pricing that may well exclude less economically advantaged individuals over the age of 30 from enjoying the same premium features.”

This case reaffirms California’s commitment to preventing discrimination under the Unruh Act, and the Court’s view that everyone is entitled to pursue love on an even playing field, with equal access to unlimited likes and five super likes a day on Tinder.