Online file sharing company Dropbox will pay $1.6 million (roughly Rs. 6.7 crores) in civil penalties and $450,000 (roughly Rs. 3 crores) in restitution as part of a settlement with prosecutors in California over its subscription renewal policies.
District attorneys in four counties sued, alleging the firm failed to properly notify customers using its paid Dropbox Pro service about its automatic renewal policy in violation of state law.
Dropbox agreed to the settlement without admitting liability. The settlement was announced Wednesday by officials in Alameda County, where the civil action was filed.
In addition, prosecutors alleged the company didn't sufficiently advise consumers that its Dropbox for Business service was intended only for organisations or businesses - not individual consumers using it for personal, family or household reasons.
Dropbox says it's pleased to have resolved the matter.
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