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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 Wal-Mart.com 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.'"

 

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