Netflix has something new in common with Redbox: each has been named as a defendant in separate class action lawsuits. Netflix’s suit, which has just been granted class action status by a federal judge, is being brought against it by a group of subscriber who are alleging antitrust practices.
The suit, which was originally filed against Netflix in 2009, alleges that “Netflix and Walmart.com colluded to control the DVD market when the latter abandoned the online rental business”, according to Bloomberg.
Netflix allegedly took over Walmart’s list of subscribers while agreeing to stay out of the retail disc business, thus causing millions of subscribers to pay “supracompetitive prices.”
Walmart has reportedly settled with the plaintiffs already, while Netflix plans to continue to fight the suit, which will reach trial next year.
Lawsuits are part and parcel with being a successful company—do you think that this one has any merit? Did these two giants, one retail and one rental, collude to dominate the DVD business?
(via Home Media Magazine)