Video & Audio|November 26, 2011| Author: Kim LaCapria|Tags: , , ,

Netflix Price Fixing Lawsuit Tossed

netflix walmart lawsuit

Finally some good news for content streaming and DVD rental company Netflix, as a lawsuit alleging price fixing has been tossed by a US District Court Judge.

US District Judge Phyllis Hamilton ruled in the case that began in 2004 amid allegations Walmart and Netflix agreed that the former would not rent DVDs to consumers as long as the latter continued to not sell the discs to customers. The case soon reached class action status, but Hamilton wrote in a ruling that even the existence of a ruling would not be much of a boon to Netflix in building its then-still-catching-on business. The Register obtained Hamilton’s decision, in which she writes:

“The court concludes that no reasonable juror could believe that Netflix would have lowered its [rental plan] to $15.99 in response to continued competition from Walmart, whose [comparable plan] was set at $17.49 – particularly when those facts demonstrate that Netflix chose not to lower its price in the face of Blockbuster’s $14.99 price cut, despite the fact that Blockbuster had a higher market share than Walmart.”

At the time of the contested action, Blockbuster controlled 17% of the DVD rental by mail market.

 

  • Anonymous

    Netflix has been getting so much negative press lately, but honestly I don’t think that it’s hurting them. What has happened, however, is that the door has been opened and there is a ton of competition out there now. One in particular is the Blockbuster Movie Pass, it’s brilliant! Working for DISH Network I ended up signing up with this when it was released in the beginning of October, I’ve loved it ever since. I get tons of streaming straight to my receiver, and what’s best is that I get an unlimited amount of games mailed to me at no extra charge! Make sure to check it out and give it some consideration.

    • James Johnson

      I disagree, the press along with a shift in consumer satisfaction killed nearly 4 percent of their userbase. Any company that foolishly thinks they can raise pricing 60% overnight obviously doesn’t understand the current economic climate. With that being said the fraction of Dish network customers signing up for Blockbuster Movie Pass isn’t enough to disrupt Netflix’s market share, besides the 800,000 customers they lost occurred before Dish announced their new movie rental and streaming platform.