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Update: Wal-Mart, Netflix sued again over 'conspiracy to create a monopoly'

Written by Andre Yoskowitz (Google+) @ 01 Feb 2009 16:19 User comments (12)

Update: Wal-Mart, Netflix sued again over 'conspiracy to create a monopoly' In 2002, the retail giant Wal-Mart decided to launch an online DVD rental business, in an effort to rival Netflix. However, Netflix did what it has to all its other competition and practically drove the startup out of business.
By 2005 Wal-Mart decided it was a waste of money and let Netflix take over its DVD rental operation while Netflix would promote Wal-Mart's in-store DVD movie sales.

This decision led to a class action lawsuit early last month as the companies were accused of "conspiring to create a monopoly for online video rentals." The "collusion" between the companies led to higher prices for Netflix customers, alleged the suit.

This week, the companies find themselves facing a new class-action lawsuit of the same type, this time from a plaintiff in Chicago.

As proof that the deal in 2005 promoted "unfair trade", the plaintiff notes that Netflix raised its average subscription price from $14.99 to $17.99 USD almost immediately after the agreement with Wal-Mart. At the time, Wal-Mart's comparable monthly plan was $12.97 USD.

“The subscription fees charged by Netflix to Plaintiff, as well as the other members of the Class, were maintained at artificially high levels,”
states the suit. “Plaintiff and the other members of the Class paid higher subscription prices to Netflix than they otherwise would have paid.”

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12 user comments

11.2.2009 16:48

lol smells like another person tryin to make a buck. I love netflix and cant stand blockbuster anymore so works for me.

21.2.2009 20:42

I love Netflix too, I tried blockbuster for three months now and they just suck. Worse at delivering movies from my list, I can't watch ANYTHING over the net for free, and they only have one plan option...way too much for way too little. It's not a monopoly, it's Blockbuster being dumb business people, they don't care to make their customers happy. They just want more money for less work.

32.2.2009 2:52

It smells like Blockbusters is trying to sue Netflix with this, I wonder whos actuality pulling the strings?

Besides why not just sue wallmart as a monopoly?
Its far worse than netflix will ever be.

42.2.2009 12:56

@b18bek9
@xugiua

Quote:
As proof that the deal in 2005 promoted "unfair trade", the plaintiff notes that Netflix raised its average subscription price from $14.99 to $17.99 USD almost immediately after the agreement with Wal-Mart. At the time, Wal-Mart's comparable monthly plan was $12.97 USD.

If you want to pay me to come round and kick you in the bollocks, I'm more than willing to take your money
This message has been edited since its posting. Latest edit was made on 02 Feb 2009 @ 12:57

52.2.2009 13:45

Were going to see alot more of this. Competition is heating up and companies such as Wal-Mart and Netflix will do anything they can to gain the bigger hand, including suing the heck out of each other. They don't need to sue when common sense will tell you they need a reality check and get a life.

62.2.2009 14:31

I dont know about everyone else but Netflix is the only company I know that has actually lowered its prices for its customers. Last year we got a letter from them stating that business was great and they were lowering our payment from $14 to $11. We have since upgraded our subscription but I am still extremely happy with Netflix's price and service. Wal-Mart is accused of bumping off competition too but their prices are still far lower than everyone elses.

72.2.2009 14:36

Originally posted by martimi:
I dont know about everyone else but Netflix is the only company I know that has actually lowered its prices for its customers. Last year we got a letter from them stating that business was great and they were lowering our payment from $14 to $11. We have since upgraded our subscription but I am still extremely happy with Netflix's price and service. Wal-Mart is accused of bumping off competition too but their prices are still far lower than everyone elses.
They are lower because they have wholesale chains all over the palce, we lost a radioshack and bi low here and thier store is not even a full fledged super store, they never keep more than 3 lanes open their staff is as clueless as ever, wall mart should be a crime...

82.2.2009 18:10

Originally posted by ZippyDSM:
their staff is as clueless as ever, wall mart should be a crime...
It makes returning anything a breeze though =P

92.2.2009 23:18

OMG, can't people accept the fact that Wal-Mart is better than any other store, and that Netflix is also?
Wal-Mart and Netflix are making so much cash because they earned it, people are so stupid and jealous.

102.2.2009 23:20

Originally posted by BTFan:
OMG, can't people accept the fact that Wal-Mart is better than any other store, and that Netflix is also?
Wal-Mart and Netflix are making so much cash because they earned it, people are so stupid and jealous.
Selling cheap crap to sheep in a monopolistic fashion that gives billions to china dose not "better" make....

113.2.2009 18:42

I have company Y but jay has company X. His company is starting to get more people and make more money, bad jay and company X. I want to sue them for taking potential customers and making me earn less. Who's with me? That is what this and other bullsmack sounds like when we read the business sections.

I forgot to mention us customers have the right to pick who we want,unless they paid the govt for the territory, the business going under should have changed there operation a little bit sooner.

This message has been edited since its posting. Latest edit was made on 03 Feb 2009 @ 18:45

126.2.2009 12:58
cptnvideo
Inactive

When are the Government auditors and the subscribers going to wake up and realize that netflix operations are a very likely a very illegal acounting scheme. I would bet that up front fees are not held in trust until used by the subscriber but used to pay for new product and shipping fees ..(ponsi?). Like any "make the management rich" schemes they will continually need to get new subscribers or hope they can drive away people who have paid before they use up their paid in advance subscriptions. In the meantime the top guys get fat bonuses also from the new subscription fees rather than from profits. If I am right their most likely next move will be to sell out to somebody like Walmart for big bucks and get out of town quickly and quietly after which subscribers will be left holding the bag. It is really quite a good scheme because there are so many small ammounts involved that even a class action suit will likely not happen and the Government will not want to embarass themselves with a prosecution. Come on guys now any large video store can get in on this, just undercut the other guys and big bonus yourself and get out of town before real accountants get at your books.

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