According to a new report, MoviePass locked out high-volume moviegoers from the service by changing their passwords, to prevent them from using the service to get tickets for Avengers: Infinity War and other movies.
During its fall from grace, movie subscription startup MoviePass is alleged to have engaged in some unusual tactics. According to a new report from Business Insider, sources claim that MoviePass CEO Mitch Lowe ordered his employees to change the passwords of users who using their MoviePass card most frequently.
Per Lowe’s orders, MoviePass began limiting subscriber access ahead of the April release of the highly anticipated “Avengers: Infinity War,” according to multiple former employees. They said Lowe ordered that the passwords of a small percentage of power users be changed, preventing them from logging onto the app and ordering tickets.
Many MoviePass users complained about login issues on Reddit around the same time that the update was released. “I’m pretty sure they did the new app today to keep people from seeing Avengers on opening night,” one user wrote.
In a statement, a MoviePass spokesperson said that the login issues were caused by an update to the mobile application that was released shortly before Avengers: Infinity War was released.
The update “reduced the number of people who were sharing their membership card with multiple people, it reduced the number of people who were buying and scalping tickets to the high demand movies, and it reduced the number of people who were buying tickets each day to various movies then exchanging them for a single movie and bringing three or four people to the same movie,” the spokesperson said in a comment for the Business Insider report. “MoviePass purchased many millions of dollars of tickets for ‘Avengers’ as we did for other hit titles.”
During the company’s demise, users became familiar with a notice on the mobile application that read: “There are no more screenings at this theater today.” According to the report, that notice was installed at the request of executives who feared that excessive movie-going through the service would wipe out the company’s remaining funds. The notice would appear when MoviePass users had exhausted a predetermined amount of funds.
Now, the DOJ is considering whether or not MoviePass’s business practices were legal. Hui Chen, the first compliance counsel expert at the DOJ, said in a comment that MoviePass CEO Mitch Lowe’s conduct could put him in hot water.
“If a company is essentially interrupting its service on purpose so that the customers would not be able to use it as promised, that sounds like cheating to me,” Chen told Business Insider. “Without having any further knowledge I don’t want to make a legal characterization to call it fraud, but it certainly sounds like it’s cheating the customers. That kind of cheating is at least unethical and it’s easily something that would be illegal with the right set of circumstances.”
You can read the entire Business Insider report here.