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Netflix/Wal-Mart DVD Class Action Lawsuit

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Because of its collusion with Wal-Mart, Netflix  has been able to charge higher subscription prices for DVD rentals than it otherwise would have charged if more competitors remained in the market.  Our Netflix/Wal-Mart Class Action Lawsuit lawyers have alleged that the actions of the defendants violated the Sherman Antitrust Act and unfairly restrained trade.

If you subscribed to Netflix between May 19, 2005 to the present, you may be eligible for compensation.  We urge you to contact one of our Netflix/Wal-Mart DVD Class Action Lawsuit lawyers right away to protect your legal rights.
 

Netflix and Wal-Mart Online DVD Rentals

Netflix is a Delaware corporation headquartered in California.  Netflix rents DVDs directly to consumers nationwide through its website, www.netflix.com.  Netflix charges monthly subscription fees and offers various subscription plans.
 

Since starting its online DVD rental business in 1999, Netflix’s total subscribers have grown at a compound annual rate of 70%, reaching about 10 million in 2007.  Its annual revenues  exceeded $1.2 billion in 2007, which has more than doubled since 2004.
 

Wal-Mart Stores, Inc. is a Delaware corporation headquartered  in Bentonville, Arkansas.  Wal-Mart Stores is the largest retailer in the United States with revenues of approximately $400 billion annually. Through its retail stores and its website, www.walmart.com, Wal-Mart Stores sells DVDs directly to consumers nationwide.
 

Wal-Mart Stores sells far more DVDs than any other retailer in the United States, accounting for about 40% of all new DVDs sold to consumers domestically.  Prior to this agreement with Netflix, Wal-Mart was a major competitor of Netflix in the online DVD rental market through the “Wal-Mart DVD Rentals” service.
 

In the online DVD rental market, consumers pay a monthly subscription fee to an online service provider, such as Netflix, Blockbuster Online, or (prior to May 19, 2005) Wal-Mart DVD Rentals, in order to rent DVDs.  There are no late fees or due dates, but, within any given plan, the consumer pays the subscription fee regardless of how many DVDs he or she rents per month.  Thus, even a consumer who does not rent a DVD for months still is charged the subscription fee.  Netflix CEO Reed Hastings has called this the “gym membership effect.”
 

Netflix/Wal-Mart DVD Class Action Lawsuit

According to a Netflix/Wal-Mart DVD Class Action Lawsuit,  Netflix, Wal-Mart Stores, and Walmart.com conspired to divide the markets for the sales and online rentals of DVDs in the United States.  The objective of this conspiracy was to avoid competition, monopolize, and illegally restrain trade in at least the online DVD rental market.
 

On May 19, 2005, Wal-Mart announced a DVD agreement in a joint press release with Netflix.  Under the agreement, Netflix would not sell new DVDs in competition with Wal-Mart. Wal-Mart, in turn, agreed to exit the online rental business. Netflix then promoted DVD sales at Wal-Mart and Walmart.com. 
 

Since the agreement was announced, Netflix has possessed a market share of at least 75% of the Online DVD Rental Market in the United States.  Since the implementation of the Netflix/Wal-Mart agreement, the online DVD rental market has been overwhelmingly comprised of only two firms: Netflix and Blockbuster Online.  Blockbuster Online controls about  25% the market.  A few minor firms have shares of less than 1-2% of the market. 
 

Online DVD rental is highly capital intensive.  A firm must operate on a large scale to be successful.  Partly because of the additional barriers raised by the Netflix/Wal-Mart DVD agreement, there have been no significant market entrants in the more than three years since it was announced.
 

As a result of its market share, Netflix has had, and continues to have, market and monopoly power in the online DVD rental Market.  It has the power to control prices or exclude competition in this market.  The end result is that consumers have been forced to pay artificially higher prices for DVD rentals.
 

The Netflix/Wal-Mart DVD Class Action Lawsuit is seeking to have  the market agreement between Wal-Mart and Netflix voided.  It also asks that the agreement be declared illegal, and is seeking three times the normal damages for plaintiffs. 
 

Legal Help for Netflix Subscribers

Our firm has helped hundreds of people victimized by the illegal actions of large corporations.  Any person in the United States that paid a subscription fee to Netflix to rent DVDs since the agreement was announced on  May 19, 2005  may be eligible for the Netflix/Wal-Mart DVD Class Action Lawsuit.

If you or someone you know purchased a Netflix DVD rental subscription anytime since May 19, 2005, you should consult with an attorney.  Please fill out our online form or call 1 800 LAW INFO (1-800-529-4636) to discuss your claim with the Netflix/Wal-Mart DVD Class Action Lawsuit lawyers at our firm.