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Netflix Wal-Mart Class Action Lawsuit

This article was written by in Consumer. 11 comments.


A few years ago, Netflix and Wal-Mart allegedly entered an agreement where Wal-Mart agreed to exist the DVD rental business and promote Netflix’s service and Netflix would not sell new DVDs to compete with Wal-Mart. A group of Netflix customers have banded together to enter a class action anti-trust lawsuit against the two companies for this practice, which allegedly allowed Netflix to gain dominance and raise customers’ fees.

Wal-Mart has agreed to settle the lawsuit. The company will pay a settlement fee of $27,250,000, with some of the proceeds going to affected customers. Netflix, on the other hand, has not yet stopped fighting the lawsuit.

NetflixYou are included in the Wal-Mart settlement class if you live in the United States or Puerto Rico and you paid a subscription fee to Netflix to rent DVDs online anytime from May 19, 2005 through September 2, 2011. Any customer who had only a free Netflix trial does not qualify. You may receive a dollar or two from this settlement, but in order to receive your benefit, you must file a claim. You can receive the payment in cash or a gift card.

The $27 million from Wal-Mart will be divided between lawyers, who will receive up to 25% of the payment plus additional costs of up to $1.7 million, administration expenses, and fees to class representatives at $5,000 a piece. The remainder will be divided equally between all settlement class members who file a claim. To get an idea of how many customers might need to split an estimated $18 million, Netflix had 24 million customers in the United States at the end of September.

Netflix is still fighting the lawsuit. They might eventually settle, and if they do, customers who would qualify for benefits include any person or entity in the United States that paid a subscription fee to Netflix anytime from May 19, 2005 to September 30, 2010. If there are benefits to receive, class members will not need to take any action. Any class members who would like to excise themselves from the lawsuit or potential settlement and reserve the right to sue Netflix regarding this issue will need to mail a letter to opt out.

The official website for the Netflix Wal-Mart class action lawsuit regarding DVD sales is onlinedvdclass.com.

Published or updated November 17, 2011. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 11 comments… read them below or add one }

avatar SteveDH

The tort laws in our country are unconscionable and indefensible. With 25% of the take PLUS additional cost PLUS administrative fees, the leaches feast while the so-called “harmed” get next to nothing. Can anyone calculate the added cost, WE ALL PAY, for insurances (similar to malpractice) and litigation reserves held by large companies because of junk suits like these? This was not a monopoly, NETFLIX wasn’t the only renter of DVDs, and Wal-Mart wasn’t the only seller. If the fees/prices weren’t competitive why did they go there?

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avatar Ceecee ♦53 (Newbie)

SteveDH makes a good point. I had Netflix during this period, but I can think of better ways to make a dollar. I’ve filled out class action forms before and this is hardly worth it.

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avatar Mike

If I was a Netflix customer I’d want to keep this lawsuit low key so I’d have a greater share of the pie.

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avatar qixx ♦1,890 (Half-Dollar)

I’ve been involved in 3 class action lawsuits. Minimum payout was $27. Maximum ended up being $39.50. I’d say worth the 2 minutes needed to enter your information. Just don’t wait (or likely even plan) on getting the check any time soon.

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avatar shellye ♦107 (Cent)

I’ve been involved in about 5 class action lawsuits over the past 7 years and have yet to receive a check from any of them. I have Netflix so I’ll probably add my name to this list too, but I doubt if I’ll see any money out of it.

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avatar tigernicole86 ♦55 (Newbie)

I’ve only been in 2 class action and one was for Macy’s(yay “free” moisturizer!). It was worth it just for a minute of my time. My boyfriend has had netflix for over 2 years but when I told him about this a few minutes ago, he laughed and said that they were already egtting their comeuppance when they had so many people drop their service and when Quixster didn’t take off.

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avatar ascanlon ♦107 (Cent)

Unfortunately I seem to be involved in at least 2 or 3 class action suits against companies from whom I have purchased or rented products. It seems there are more class actions suits every year. I always file a claim when I hear about a class action suit. Even if you only get a few dollars back I think its worth your while, if you saw a dollar on the ground you would pick it up right?

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avatar Cindy

I think it’s stupid to be in on this claim. First of all as pointed out in other posts Netflix and Walmart didn’t monopolize anything so where are they wrong in their actions? Also yes I am irritated that Netflix raised their prices over and over again and eventually discontinued my account but I don’t think it got so expensive that it is worth it for anyone to join a class action suit. Also the amount of money that anyone will see is going to be next to nothing as the lawyers involved will take nearly all of it and divide the remainder 1 or 2 million dollars among possible hundreds of thousands of complainants. Does that really seem worth it to anyone else? I know that it doesn’t to me. I also think those of you who join a class action suit just because you could even if you suffered no ill effect or payed for a service and received it are just plain greedy. This right here is why we have such inflation. Well this and Obama.

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avatar lynn ♦155 (Cent)

It seems attornies have ound a way to make easy money. (easier) I’ll add my name because a buck is a buck, but all of this class action garbage going on only benefits attornies. They are, after all, the ‘new priesthood’ with a finger in all of the pies.

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avatar Bret @ Hope to Prosper

I’m not a big fan of class action lawsuits, but the Walmart / NetFlix agreement sure seems anti-competitive to me. Walmart had to be thrilled to get away with this for such a small settlement. I believe they are the largest seller of DVDs in the world. Instead of lawyers filing lawsuits, the government should be enforcing the anti-trust laws we already have.

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avatar Joseph Santoli

I am representing Netflix shareholders on a new case. Please call my cell at 201-926-0200. Jos. Santoli, Esq.

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