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Class Action Status Granted to NetFlix Customers

A judge recently ruled claimants in a suit against Netflix Inc. and Wal-Mart were "united by common and overlapping issues of fact and law" enough to merit class-action certification. In their claim, Netflix subscribers "charged that Netflix and Wal-Mart conspired in 2005 to divide the market for selling and renting DVDs to reduce competition. The companies formed an agreement in which would stop renting DVDs online and Netflix wouldn't offer them for sale." A December 14 motion notes a "preliminary settlement" in which Wal-Mart would pay plaintiffs "as much as $40 million in cash or equivalents." Netflix dismissed the case as having "no merit."

Despite their market agreement with Netflix, Wal-Mart dropped hands with its partner when the lawsuit was filed. The giant retailer -- no stranger to class action litigation -- decided to settle with the plaintiffs, and reportedly will end up paying out $40 million to erase the claim. A hearing on the Wal-Mart motion will be held in early February. Netflix is not part of that settlement -- it was a deal that Wal-Mart cut on its own." Author Al Norman goes on to say, "Netflix should download Wal-Mart's script: settle the case, admit no wrong-doing, pay millions to the plaintiffs, and get back to its 'core competency.'"