Furthermore, the executives reportedly stated that HMNY had “big data” and AI technology that could be utilised to generate income for the firm by analysing data from MoviePass members. According to the indictment, they made the assertion while knowing that HMNY lacked the technology and competence to commercialise subscriber data.
Another charge levelled against the CEOs is that they made misleading claims about MoviePass’s profitability from different income sources. According to officials, the company lacked a non-subscription income source that would allow it to be self-sufficient or balance its losses. Farnsworth and Lowe were also accused of using different strategies to deny specific consumers access to their “unlimited” service. If you remember, MoviePass had to settle with the FTC in 2021 over charges that it purposefully invalidated subscriber passwords in order to justify freezing accounts of frequent users.
