RSSFTC Opposes Netflix Settlement
By Nate Mook | Published January 11, 2006, 7:26 PM
The Federal Trade Commission has filed an amicus brief in opposition of the proposed Netflix class action settlement. The company was sued for advertising "unlimited" DVD rentals and "one day delivery" when it couldn't guarantee either. The FTC says the settlement is not beneficial to consumers.
As previously reported, Netflix agreed to provide customers with a one-month service level upgrade free of charge. This means that Netflix users subscribed to the 3 DVDs at-a-time program will be upgraded to 4 DVDs at-a-time for one month. After the free month, customers must remember to downgrade their service manually or face higher fees.
Former customers who were Netflix members prior to January 15, 2005 will receive a free month of service if they subscribe to Netflix once again. The membership and monthly charges will continue on a monthly basis after the initial month.
The FTC balked at such a proposal, saying "Class members who participate in the settlement would be enrolled automatically in a negative option plan and charged for the upgrade or service after the free month, unless they chose to cancel."
The Commission also raised questions about the settlement's proposed payouts to the lawyers involved in the case, which topped $2.5 million. "The settlement also would require Netflix to modify its marketing materials and pay up to $2.528 million in class counsel fees and costs," the FTC said.
"The settlement would serve more as a promotional vehicle for Netflix, than a means of providing redress to consumers, and could leave some consumers in a worse position than if they had decided not to participate."
Such opposition does not mean the settlement will not be approved, but the FTC opinion could weigh heavily in court.
Finally a government agency that took the side of the class members... This is similar to the 'proposed' settlement of a Time Warner class action suit whereby the lawyers make millions, the original plaintiffs get $2,500 each (2 plaintiffs) and the class members have to remember and cancel the 'free' subscriptions.
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|This reminds me of AOL's marketing ploy.
Free 30 days of service! Just don't forget to cancel or pay $24.99 even if you don't use it.
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|But unlike AOL, Netflix makes it easy to both Upgrade/Downgrade and cancel account. It's all web based, so I really think this opposition is just crap.
IMHO: You can't opose a settlement just becuase users are lazy.
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|Wow, what a great marketing ploy; use a lawsuit settlement to screw your customers even more. What'll they think of next???
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|"The settlement would serve more as a promotional vehicle for Netflix, than a means of providing redress to consumers, and could leave some consumers in a worse position than if they had decided not to participate."
I completely agree with this statement. In order to receive the "free month", consumers who had cancelled their netflix sucscriptions are required to re-join and re-submit credit card info; this places the burden of cancelling (or risk being charged additional unwanted fees) on the consumer, and not netflix, where it properly belongs.
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|Hey -- you can't get good by lying. I'm quite glad they opposed this because the remedy is to let someone rent an extra movie for a month, then get charged for it thereafter unless they change it. It's a crap remedy, and I'm glad the FTC agrees. They should be crediting accounts for actual $$.
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|Screw the government. Don't ever become successful in America, or the government will want a slice of the pie as well, and look for these petty stupid excuses to get it.
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|What a crock.
Don't screw people and no one will bother you.
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|Moron!
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|Man, you're super smart...
Did you even read the article?
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|That's actually not true either. If you own a business, you have a pretty good chance of being sued, even when you don't do anything illegal or immoral. Its a get rich quick scheme of the new century, sue.
So, don't think that because you "lay low" you won't get bothered.. People can sue just because they THINK they can get away with it...
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|What rijp says is true, coming from a business owner myself.
The issue here lies within the typical un-wisdom that prevails in the US today. People sue not because they've been wronged, but because they see it as a way to easy money. Basically, they go after someone or something that is successful as a means to profit immorally on their effort. It's the search for the unearned.
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|You didn't read his comment, huh?
Typical.
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