RSSNetflix and Wal-Mart sued for 'injuring' consumers with DVD prices
By Jacqueline Emigh | Published February 11, 2009, 4:14 PM
Hot on the heels of similar lawsuits against Netflix and Wal-Mart in other states, a new court action in West Virginia charges that the two companies colluded over dinner to drive DVD prices "artificially higher."
A newly filed suit by a West Virginia law firm alleges that Netflix and Wal-Mart have broken antitrust laws and caused "damage" to past and current Netflix customers in the US by divvying up various segments of the online and retail DVD market between themselves.
Similar legal actions are reportedly also under way against Netflix and Wal-Mart in at least eight other states, including California, Pennsylvania, Minnesota, and Arkansas.
The suit in West Virginia contends that, during a dinner meeting in 2005, Netflix agreed to stay out of DVD sales if Wal-Mart in turn would refrain from online DVD rentals.
"Faced with increasing competition and decreasing profits, [Netflix Chairman and CEO Reed] Hastings invited Walmart.com's CEO John Fleming to dinner to discuss their companies' DVD sales and rental businesses," the lawsuit reads. "This meeting marked the beginning of defendants' conspiracy to reduce competition in both markets."
Prior to that fateful dinner, enough competition existed between Wal-Mart, Netflix and their chief rival Blockbuster to push prices down, according to the plaintiffs in the West Virginia case, husband and wife Brandon and Jennifer Walters. But afterward, Wal-Mart and Netflix inked a "Market Division Agreement," enabling both Netflix and Blockbuster to hike their prices a couple of months later. Wal-Mart and Netflix "would not have entered into their Market Division Agreement absent an illegal, anti-competitive agreement not to compete," the Walters said in the filing.
Although the suit was initially filed on behalf of the couple, the Walters want US District Judge John T. Copenhaver, Jr. to certify the suit as a class action so that others can join in, too.
"Plaintiffs bring this class action on behalf of themselves and other similarly injured consumers in the United States who paid a subscription fee to rent DVDs from Netflix during the period May 19, 2005 to the present," the two plaintiffs told the court. "At all relevant times, Defendants agreed, combined, and conspired with each other to monopolize, eliminate competition, and to restrain trade. As a results of Defendants' unlawful conduct and conspiracy, Plaintiffs and the other members of the Class paid artificially high subscription fees and have been damaged thereby."
Oh boy, this is so very important along with the abundance of other problems the USA has. LOL Americans, is this all you have to worry about? Your country is falling apart piece by piece and some of you worry about sueing walmart and netflix lol pathetic.
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|Whine.
Yup, a salient poin t when the majority of DVDs at WalMart are priced between $5 and $13.
And because folks are too stupid or incapable of comparison shopping or checking online??????
Funny, the prices at everyone's beloved BestBuy and other retail outlets are HIGHER - yet no one is suing them.
What is funniest is to listen to so many whine. As if movies are necessities and they don't have choices as to where they will buy , IF they simply cannot control themselves nor make the decision to forgo the first run movie and not wait until it drops further in price after 6-8 months or shows up on FREE over the air television.
Its just soooo sad...
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|no way any prices are artificially high in this world we live in..!!!!11 Oh wait they all are high..
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|i like to sue the movie industry for the cost of my movie ticket, gasoline, time and the distress caused me by going and paying to watch a movie marketed as the years most anticipated release but was UTTER CRAP.
subsequently, suing walmart and netflex would be reasonable because they perpetuated in the B-A-M-B-O-O-Z-L-E afterward.
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|If I remember it, Netflix actually reduced the prices. Those people are just trying to make a quick buck.
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|I think they simply shouldn't allow lawsuits like this. At least not unless the plaintiff's are willing to pay ALL court costs in the event of a loss. In the event of a win, court costs could be split or paid by defendent. I just can't see wasting ANY tax payers money over this.
Now, if it were an item that is a necessity, then perhaps. Or if it was rampant such that DVD prices were raised to $50 a DVD and rentals were tripled in price. But I think any increase either did was very minimal.
And can anyone argue that netflix wouldn't have raised prices anyway? If anything, walmart getting into the game might simply have forced netflix to close its doors.
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|I'm sure that if someone is suing another person, it has enough proof that what it's claiming happened. of course, the defendant must have proof that all is a misunderstanding, and they have been legal all the time.
winning the case is a risk the plaintiffs must take, they possibly can lose even if they have the most concise proofs.
I think the law should be free. or some will not sue because they can't afford it.
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|There needs to be some penalty of suing in certain cases though - otherwise there is no reason not to sue someone all the time.
My only gripe with this case is that it is about something that is not necessary. Right or wrong, what netflix and walmart did or didn't do has no bearing on any necessary item someone must have. If they did this over drinking water, food or any other necessary item, I could see the merit behind a lawsuit but too bad if someone has to pay an extra $1 for their movie..
I'm a netflix subscriber and I've never had any issue with any increase and have never seen anything dramatic. In fact, I cant' recall the last time my fee was raised other then the blu-ray increase.
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|This one makes no sense to me. There's others to file that make more sense. Like hiking the rental fee for blu ray rentals a $1 a month when the blu rays are rarely sent.
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|How did the couple learn of these "facts?"? Was they sitting at a nearby table, did they bug one of their ties, did one of the CEOs tell them all this? Such a lawsuit needs to have some basis for its existence (other than greed for money or to stick it to the Man).
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|Antitrust laws are very strict. For instance: Real estate companies are not even allowed to simply discuss real estate commission rates, even briefly over dinner. The laws are that strict. However, government enforcement appears to be extremely lax.
What amazes me, is that 3 big online game distributors (in a published online interview), openly talked to each other about how much they charged per month and how much they thought the market could tolerate. The general conclusion was around $15 a month. Two or three months later online game monthly rates nearly doubled. Anyone guess what they raised it to? Fifteen dollars a month. Seems like an interesting coincidence, yes?
Last I heard, online gaming revenue is over $5 billion a year.
Compared to this article, it would seem they have bigger fish to catch.
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|I will say this about walmart and the dvds that they don't carry enough of them and also that walmart needs to carry more movies on blu-ray, everytime I go to the walmart by me they never have any blu-ray movies or even dvds, its like they don't even care about about the consumers. They are always out of stock of the dvds, most of the blu-rays that I see in best buy or suncoast walmart only has about maybe 20 if that in stock at any given time. If people want to file a lawsuit against walmart then it should be on things like not carrying enough titles on blu-ray or dvds, not stupid little things like this, their prices on dvds are the lowest around that I have seen, unless you count websites like half.com or ioffer where you can get movies on dvd very cheap if you look around.
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